- The US SEC has levelled multiple charges against the Beaxy Exchange.
- The Exchange has thus temporarily suspended operations
- In its defence, Beaxy has stated that it will cooperate with the SEC over the next two years.
US-based cryptocurrency exchange Beaxy Exchange has stopped operations after the US Securities and Exchange Commission (SEC) brought multiple charges against the platform and its founder, Artak Hamazaspyan.
The SEC and other US regulatory bodies seem to be implementing a strong crackdown on cryptocurrency exchanges. Soon, the full details of the SEC’s lawsuit against Beaxy will be made available. The Commodity Futures Trading Commission (CFTC) also filed a lawsuit against Binance and its CEO Changpeng ‘CZ’ Zhao.
The exchange released a statement in response to the SEC lawsuit:
“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.”
SEC Sues Beaxy Over Unlicensed Security Products
According to the SEC’s press release, Beaxy Exchange and its employees were accused of failing to register as a national securities exchange or clearing agency for the sale of BXY tokens.
By selling the BXY token (which the SEC states is an unregistered security), the exchange was able to raise $8 million. The SEC also claims that Beaxy’s founder Artak Hamazaspyan misappropriated $900K for his own use, which he claims included gambling. In addition, the SEC alleges that Beaxy’s market makers operated as unregistered dealers.
The SEC says Beaxy violated the Securities Exchange Act 1934.