The US SEC has filed a lawsuit against the Beaxy exchange, shutting down its operations. The U.S. regulator alleged that the founder of Beaxy used $900,000 for personal use including gambling.
The SEC claims that Beaxy Exchange operated without being registered as a national securities exchange, broker, or clearing agency, according to an official news release.
“We claim that Beaxy and its affiliates exercised the roles of an exchange, broker, clearing agency, and dealer without registering with the Commission and complying with clear, time-tested standards governing those operations,” said SEC Chairman Gary Gensler.
“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.”said SEC Chairman Gary Gensler.
Following an evaluation of the exchange’s numerous features, several Twitter users backed the SEC’s decision.
Beaxy Exchange Founder Gambled With User Funds
Beaxy was accused of generating $8 million through an unregistered issuance of its native token, BXY, by the SEC. The exchange’s creator, Artak Hamazaspyan, is also accused of misusing $900,000 for personal purposes, including gambling, according to the commission.
“This action serves as yet another warning to crypto intermediaries that their business models must conform and adapt to the law, not the other way around,” Gensler said in the complaint.
Beaxy Exchange decided to halt operations without acknowledging or disputing the allegations. They will pay a total of $79,200 in civil fines.
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.”