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Crypto Exchange and Founder Sued by SEC in Wake of Binance CFTC Lawsuit

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Thu, 30/03/2023 - 13:14
Crypto Exchange and Founder Sued by SEC in Wake of Binance CFTC Lawsuit
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In the first-of-its-kind action by the regulator against a cryptocurrency platform, the U.S. Securities and Exchange Commission has filed legal action against Beaxy.com for concurrently running an unregistered exchange, brokerage and clearing company. The complaint was filed in a federal court in Chicago.

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SEC Chair Gary Gensler has frequently chided digital assets companies for running multiple businesses that, in his opinion, ought to be run by distinct entities.

Gensler urged such companies to separate and register each of their different operations separately.

The SEC has been stepping up enforcement against bigger industry players, most recently notifying Coinbase of its plan to sue over unregistered digital asset offerings and other issues.

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On Monday, Binance, the world's largest crypto exchange, was sued by the U.S. Commodity Futures Trading Commission for allegedly breaking trading and derivatives rules.

Binance stated that it disagreed with the characterization of several issues alleged in the complaint.

Artak Hamazaspyan, the founder of Beaxy, was also charged by the SEC with securities fraud. The business raised $8 million through the sale of its cryptocurrency token, BXY, and the SEC claimed that Hamazaspyan misappropriated $900,000 for use in gambling and other activities.

Separately, the agency announced that it had reached a settlement with Nicholas Murphy and Randolph Bay Abbott, who are presently in charge of managing Beaxy.

As part of a settlement, Beaxy consented to shut down its website. On Wednesday, the company's main website announced that operations had ended "due to the uncertain regulatory environment surrounding our business."

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