- Crypto exchange Beaxy has closed down following charges by the SEC
- Beaxy, its founder, and current operators were hit with various securities charges
- The founder, Artak Hamazaspyan, has also been charged with misappropriation of funds
Beaxy has become the latest exchange to feel the force of the Securities and Exchange Commission’s crypto-crippling mission, shutting its services following a lawsuit from the agency. The exchange, which hasn’t been active on its Twitter account since November 2021, posted a message on its homepage to say that it had “made the difficult decision to cease operations” after five and a half years, citing the “uncertain regulatory environment” surrounding its business. As far as the SEC is concerned there is no uncertainty – the company and its founder, Artak Hamazaspyan, operated a “national securities exchange, broker, and clearing agency” without registering it, and also accused him of misappropriating company funds.
SEC Says Hamazaspyan Misappropriated $900,000
The SEC filed charges against Hamazaspyan and Beaxy, which was one of the first exchanges to delist XRP after the SEC filed securities charges against it in December 2021, yesterday, claiming that the exchange violated securities law on three fronts: the company brought together buyers and sellers of securities using non-discretionary methods and should have registered as an exchange, it acted as an intermediary for payments and deliveries and should have registered as a clearing agency, and it regularly conducted transactions for others in crypto assets that were offered and sold as securities, and should have registered as a broker.
Alongside this, the agency has leveled charges at Hamazaspyan specifically, claiming that he raised $8 million in an unregistered offering of the Beaxy token (BXY) and alleged that he misappropriated at least $900,000 for personal use, including gambling. The SEC adds that after the company’s current owners, Nicholas Murphy, and Randolph Bay Abbott, convinced Hamazaspyan to resign following the BXY token sale and the misappropriation of investor assets, the pair continued to violate securities laws through the operation of the Beaxy platform, and so are equally culpable.
Beaxy Operators Pay the Penalty
Beaxy hasn’t had a Twitter presence since its most recent tweet on December 16, 2021, which is never a good sign, and the exchange quickly shut its doors following the SEC’s announcement:
Murphy, Abbott, and other connected individuals and entities have already settled with the SEC for a total of $79,200 in civil penalties without admitting liability. However, the SEC is still litigating its charges against Hamazaspyan for securities fraud and against Hamazaspyan and Beaxy Digital for the unregistered offering of BXY.