CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • DeFi & NFT
  • Buy
  • Language
    • Spanish
    • Turkish
    • German
    • Bulgarian
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • DeFi & NFT News
  • Bitcoin Price Analysis
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • CryptoPotato Spanish
  • CryptoPotato Turkey
  • CryptoPotato Germany
  • CryptoPotato Bulgaria
  • Market Updates
  • BTC Analysis
  • ETH Analysis
  • XRP Analysis
  • Interviews
CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • DeFi & NFT
  • Buy
  • Language
    • Spanish
    • Turkish
    • German
    • Bulgarian
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • DeFi & NFT News
  • Bitcoin Price Analysis
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • CryptoPotato Spanish
  • CryptoPotato Turkey
  • CryptoPotato Germany
  • CryptoPotato Bulgaria
Home » Crypto News » SEC Sues Beaxy for Operating an Unregistered Securities Platform

SEC Sues Beaxy for Operating an Unregistered Securities Platform

Author: Anthonia Isichei

Last Updated Mar 30, 2023 @ 07:24

Beaxy has become the latest crypto platform to be charged with running an unregistered securities exchange by the SEC.

Getting your audio player ready...

The US Securities and Exchange Commission (SEC) alleged that crypto trading platform Beaxy and its executives ran an unregistered securities exchange, broker, and clearing agency.

The platform ceased operations a day before the SEC lawsuit.

Beaxy Fouder Misappropriated Nearly $1M in Investor Funds

In a press release on Wednesday (March 29, 2023), the SEC stated that Beaxy functioned as an exchange, a broker, and a clearing agency without registering all three services.

Beaxy founder Artak Hamazaspyan is also accused of unlawfully raising $8 million in an unregistered securities offering of its native token, BXY. According to the SEC complaint, Hamazaspyan embezzled $900,000 of the funds for personal use, which included gambling.

The SEC also brought charges against Nicholas Murphy and Randolph Bay Abbott, who maintained the Beaxy platform through Windy.

As stated in the press release, Murphy and Abbott took over Beaxy and were operating the platform through Windy after Hamazaspyan stepped down following the unregistered token sale and his embezzlement of investors’ funds. The US regulator alleges that Windy violated securities laws because it ran an unregistered exchange, broker, and clearing agency.

According to the director of the agency’s division of enforcement, Gurbir Grewal, Beaxy’s alleged lack of distinction between the three functions was risky for investors.

“To protect investors, there are separate registration requirements for exchanges, brokers, and clearing agencies, with each essentially acting as a check on the other. When a crypto intermediary combines all of these functions under one roof—as we allege that Beaxy did—investors are at serious risk. The blurring of functions and the lack of registrations meant that regulations designed to protect investors were not followed or even recognized by Beaxy.”

Furthermore, Brian Peterson and his companies, collectively called Braverock entities, were also caught in the SEC charges. Brian and his companies struck an agreement with Windy to provide market-making services for the Beaxy token and also made a similar arrangement for another crypto security, causing Peterson and Braverock to be unregistered dealers.

Beaxy Shuts Down Operations

While Murphy, Abbott, Windy, and Peterson neither denied nor accepted the SEC allegations, the parties agreed to carry out certain actions, which includes closing down the Beaxy platform and ceasing the operations of an unregistered exchange, clearing agency, and a broker. Windy will also destroy all BXY tokens in its possession.

Notably, Beaxy announced on March 28 in a blog post, a day before the SEC’s press statement, that it would close down operations because of the “uncertain regulatory environment surrounding its business.”

Beaxy noted that the exchange cooperated with the SEC for more than two years but said the uncertain regulatory landscape made it difficult for the platform to keep functioning. Trading has been halted, and users are advised to withdraw their assets within 30 days.

Meanwhile, the SEC said it is “litigating its charges against Hamazaspyan for securities fraud and against Hamazaspyan and Beaxy Digital for the unregistered offering of BXY.”

The latest development shows the SEC’s continued clampdown on the crypto industry in recent times. The watchdog previously accused Coinbase, Kraken, Genesis, and Gemini of breaking securities laws.

SPECIAL OFFER (Sponsored)
Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 exclusive welcome offer on Binance (full details).

LIMITED OFFER for CryptoPotato readers at Bybit: Use this link to register and open a $500 FREE position on any coin!

Tags: SEC Security United States
Enjoy reading? Share with your friends
Facebook Twitter LinkedIn Telegram

About The Author

Anthonia Isichei
More posts by this author

Anthonia is a fintech writer who has been involved in the crypto space since 2017 covering developments across regulations, adoption, and several other aspects of the Industry. When not neck-deep in the crypto news cycle, Anthonia spends her free time globetrotting and playing video games.

Join Our Community

FacebookX YouTubeTelegram


Editorials
How to Trade on Hyperliquid: The Ultimate Guide (Step-by-Step Walkthrough)

How to Trade on Hyperliquid: The Ultimate Guide (Step-by-Step Walkthrough)

11 Best Meme Coins to Watch in June 2025

11 Best Meme Coins to Watch in June 2025

7 Best Meme Coin Presales to Watch in June 2025

7 Best Meme Coin Presales to Watch in June 2025

Toobit Review 2025: Is Toobit a Safe Crypto Exchange?

Toobit Review 2025: Is Toobit a Safe Crypto Exchange?

Hyperliquid Bridge: How to Bridge USDC to Hyperliquid

Hyperliquid Bridge: How to Bridge USDC to Hyperliquid

11 Best Crypto Presales to Consider in June 2025

11 Best Crypto Presales to Consider in June 2025

Need for Speed – Only Ultra-Fast Blockchains Will Win the Adoption Race (Opinion)

Need for Speed – Only Ultra-Fast Blockchains Will Win the Adoption Race (Opinion)

Join Our Newsletter
Become a CryptoPotato VIP
One Weekly Email Can Change Your Crypto Life.
Sign-up FREE to receive our extended weekly market update and coin analysis report
We NEVER send spam. You can unsubscribe at any time.
Invalid email address
Thanks for subscribing!
Footer Logo
About
Advertise on CryptoPotato
About Us | Contact Us | Careers
Editorial Policy
Terms of service | Privacy Policy | GDPR
More Sections
IEO List | Evaluations
Airdrops
Scholarship
Disclaimer
Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
© Copyright CryptoPotato 2016 - 2025
Scroll to top
One Daily Email Can Change Your Crypto Life.

Sign-up FREE to receive our extended daily market update and coin analysis report

We never send SPAM. You can unsubscribe at any moment
Invalid email address
Thanks for subscribing!