The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against the Beaxy exchange, shutting down its operations.
According to an official press release, the SEC alleges that Beaxy operated without registering as a national securities exchange, broker, or clearing agency.
The SEC chairman Gary Gensler says, “We allege that Beaxy and its affiliates performed the functions of an exchange, broker, clearing agency, and dealer without registering with the Commission and complying with clear, time-tested rules governing those activities.”
Some Twitter users supported the SEC’s move after evaluating the exchange’s various features.
Beaxy Exchange Founder Gambled With User Funds
The SEC charged Beaxy with raising $8 million through the unregistered offering of its native token, BXY. The regulator also alleges that the exchange’s founder, Artak Hamazaspyan, used $900,000 for personal use, including gambling.
Through the lawsuit, Gensler warned crypto companies again, saying, “This case serves as yet another reminder to crypto intermediaries that their business models must comply and adapt to the law, not the other way around.”
The Beaxy executives agreed to cease the operations without admitting or denying the allegation. In total, they will pay $79,200 in civil penalties.
Beaxy writes in a blog, “We forthrightly committed to cooperation with the Securities and Exchange Commission (SEC) for over two years, continually providing information, data, and interviews to assist regulators in whatever manner we could. Unfortunately, despite our best efforts, it has become clear that the regulatory environment is just too uncertain to continue operations.”
On March 23, the SEC also warned against investing in crypto assets securities. They reasoned with price volatility and lack of investor protection. The agency served Coinbase with a Wells Notice and sued Justin Sun for offering BTT and TRX as unregistered securities.
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