Share this article
Crypto Exchange Beaxy Shut Down After SEC Lawsuit
The Securities and Exchange Commission also accused the exchange's founder of misappropriating customer money.
Updated Mar 29, 2023, 3:12 p.m. Published Mar 29, 2023, 2:30 p.m.
Make us preferred on Google
Crypto trading platform Beaxy has officially closed its doors as the U.S. Securities and Exchange Commission charged the company and its founder, Artak Hamazaspyan. with operating an unregistered exchange and brokerage, the agency said Wednesday in a statement.
The SEC also accused Beaxy Digital Ltd. of illegally raising $8 million in the offering of an unregistered security with its BXY token. The agency additionally noted Hamazaspyan “misappropriated at least $900,000 for personal use, including gambling.”
STORY CONTINUES BELOW
Windy Inc. took over the platform in 2019 after the founder misappropriated money, according to the SEC, and managers Nicholas Murphy and Randolph Bay Abbott maintained Beaxy for trading crypto assets “that were offered and sold as securities,” the SEC said. So the agency is also accusing them of violating securities law by operating an unregistered exchange, broker and clearing agency, though the platform was described as defunct in another SEC case last year.
“When a crypto intermediary combines all of these functions under one roof – as we allege that Beaxy did – investors are at serious risk,” Gurbir Grewal, the SEC’s enforcement chief, said in the statement. “The blurring of functions and the lack of registrations meant that regulations designed to protect investors were not followed or even recognized by Beaxy.”
The exchange posted on its website that it was suspending its operations because of the “uncertain regulatory environment surrounding our business.”
“We forthrightly committed to cooperation with the Securities and Exchange Commission for over two years, continually providing information, data and interviews to assist regulators in whatever manner we could,” Beaxy said.
The SEC's statement doesn’t mention that Beaxy closed under an agreement in federal court with Windy and the people associated with that company. The agreement included returning all assets to customers and “destroying” any BXY in Windy’s possession. The SEC is still pursuing Beaxy Digital and Hamazaspyan with litigation, the agency said.
Customers of the exchange will be able to withdraw their assets within 24 hours after all user orders are canceled and balances are verified and are encouraged to do so within 30 days, the SEC said.
UPDATE (March 29, 14:45 UTC): Adds details about the shutdown of the website.
More For You
Pudgy Penguins is building a multi-vertical consumer IP platform — combining phygital products, games, NFTs and PENGU to monetize culture at scale.
What to know:
Pudgy Penguins is emerging as one of the strongest NFT-native brands of this cycle, shifting from speculative “digital luxury goods” into a multi-vertical consumer IP platform. Its strategy is to acquire users through mainstream channels first; toys, retail partnerships and viral media, then onboard them into Web3 through games, NFTs and the PENGU token.
The ecosystem now spans phygital products (> $13M retail sales and >1M units sold), games and experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to 6M+ wallets). While the market is currently pricing Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption and deeper token utility.
More For You
Crypto faces fork in the road as Clarity Act support wavers, Bitwise says
The asset manager argued that without federal legislation, the industry has three years to become indispensable before political winds potentially shift.
What to know:
- Bitwise said in a blog post Monday that Polymarket odds for the Clarity Act have fallen from 80% to 50% following industry pushback.
- If the bill fails, Bitwise believes crypto must achieve mass adoption in stablecoins and tokenization to force a regulatory hand.
- The firm anticipates a sharp rally upon the bill's passage, while a failure would likely lead to a "slower ascent" tied to proven utility.
