SEC charges crypto trading platform Beaxy for operating unregistered exchange

The Securities and Exchange Commission charged the crypto asset trading platform beaxy.com and its executives for failing to register as a national securities exchange, broker, and clearing agency. The SEC also charged the founder of the platform, Artak Hamazaspyan, and a company he controlled, Beaxy Digital, Ltd., with raising $8M in an unregistered offering of the Beaxy token and alleged that Hamazaspyan misappropriated at least $900,000 for personal use, including gambling. Finally, the SEC charged market makers operating on the Beaxy Platform as unregistered dealers. According to the SEC's complaint, since October 2019, Nicholas Murphy and Randolph Bay Abbott, through the company they managed, Windy Inc., maintained and provided the Beaxy Platform as a web-based trading platform that facilitated buying and selling of crypto assets that were offered and sold as securities. The complaint alleges that Windy, through the Beaxy Platform, violated the Securities Exchange Act of 1934 because it: Brought together the orders for securities of multiple buyers and sellers using established, non-discretionary methods under which such orders interacted, and the buyers and sellers entering such orders agreed to the terms of a trade, and thus should have registered as an exchange; Acted as an intermediary in making payments and deliveries upon matching sell and buy orders and maintained custody of customer assets, and thus should have registered as a clearing agency; and Was regularly engaged in the business of effecting transactions for the account of others in crypto assets that were offered and sold as securities, and thus should have registered as a broker. Reference Link