As a result of the U.S. The Securities and Exchange Commission (SEC) charged the company and its founder, Artak Hamazaspyan. with running an unlicensed exchange and brokerage.
The SEC also accused Beaxy Digital Ltd. of fraudulently raising $8 million in an unregistered security offering with its BXY cryptocurrency.
Beaxy SEC Lawsuit
According to the SEC’s complaint, Nicholas Murphy and Randolph Bay Abbott, through the company they managed, Windy Inc., have maintained and provided the Beaxy Platform as a web-based trading platform that facilitated the buying and selling of crypto assets that were offered and sold as securities since October 2019.
According to the lawsuit, Windy violated the Securities Exchange Act of 1934 through the Beaxy Platform by:
- Brought together several buyers’ and sellers’ orders for securities using established, non-discretionary means by which such orders interacted, and the buyers and sellers entering such orders agreed to the terms of trade, and therefore should have registered as an exchange;
- Acted as an intermediary in making payments and deliveries based on matching sell and purchase orders, and so should have been registered as a clearing agency; and
- Was regularly engaged in the business of effecting transactions in crypto assets that were offered and sold as securities for the account of others, and thus should have registered as a broker.
According to the SEC’s complaint, after Murphy and Abbott persuaded the platform’s founder, Hamazaspyan, to resign following the unregistered offering of BXY and the misappropriation of investor assets, the two continued to operate the Beaxy Platform through Windy, and are thus liable for operating an unregistered exchange, broker, and clearing agency.
Agreed To Permanent Injunctions
In accordance with the Consents filed in the U.S. Windy, Murphy, Abbott, and Peterson agreed to perform certain undertakings in District Court for the Northern District of Illinois today, including ceasing all activities as an unregistered exchange, clearing agency, broker, and dealer; shutting down the Beaxy Platform; providing an accounting of assets and funds for the benefit of customers; transferring all customer assets and funds to each respective customer; and destroying any and all BXY in Windy’s possession.
Windy, Murphy, Abbott, Peterson, and the Braverock Entities have consented to permanent injunctions preventing future violations of the securities laws stated in the complaint, as well as to pay civil fines, without admitting or denying the accusations in the complaint.
The SEC is suing Hamazaspyan for securities fraud, as well as Hamazaspyan and Beaxy Digital for the unregistered offering of BXY.