By George Ward
After sending Coinbase a Wells Notice a few days ago, the US Securities and Exchange Commission (SEC) has gone after another crypto exchange (Beaxy). Per an official press release, the SEC claims that Beaxy carried out its operations without completing the necessary registration as a broker, clearing agency, or national securities exchange.
SEC Chairman Comments On Recent Charges
Gary Gensler, the chairman of the SEC, claimed that Beaxy and its associates carried out activities of a clearing agency, dealer, broker, and exchange without completing the registration process with the Commission. In addition, the chairman noted that the exchange did not adhere to established regulations governing such actions.
Meanwhile, after scrutinizing the exchange’s features, many Twitter users supported the SEC’s action. Additionally, the SEC charged Beaxy for gathering $8 million through an unregistered offering of BXY, its native token.
Furthermore, the regulatory body asserts that Artak Hamazaspyan, the exchange’s founder, utilized $900,000 for personal purposes such as gambling. In light of the lawsuit, Gensler issued a cautionary statement to crypto companies, emphasizing that it is their responsibility to conform to the law and adjust their business models accordingly rather than the law adapting to their practices.
As part of the settlement, the Beaxy executives have agreed to halt their operations without denying or admitting the allegations and will pay $79,200 in civil penalties. In a blog post, Beaxy stated that they had been fully committed to cooperating with the SEC for over two years.
They claim to have provided regulators with all necessary data, information, and interviews. The post further read, “despite our efforts, it has become apparent that the current regulatory landscape is too ambiguous, and as a result, we cannot continue our operations.
SEC Warns The Public About Crypto Securities
Recently, the SEC re-issued a warning against investing in crypto assets, citing concerns about their price volatility and the absence of investor protection measures. Meanwhile, crypto companies have been calling on the SEC to provide more definitive guidance on regulations to facilitate compliance and lawful operation.
This remains a significant obstacle for the industry, and they continue to try to gain regulatory bodies’ trust and approval. Apart from the securities regulator, the Commodity Futures Trading Commission (CTFC) has also gone after crypto exchanges, with Binance being its latest victim.
The CFTC alleged Binance and its CEO, Changpeng Zhao, broke derivatives and trading regulations.