The SEC also accused Beaxy of illegally raising $8 million in an unregistered securities offering. Charges have also been filed against the founder of the platform, Artak Hamazaspyan. The agency noted that Hamazaspian “improperly embezzled at least $900,000 for personal use, including gambling.”
“When a crypto intermediary bundles all the features – as Beaxy did – investors are at serious risk. The blurring of functions and lack of registrations meant that the rules designed to protect investors were not followed and not even recognized by Beaxy,” the SEC said in a statement.
On its website, the exchange said it was suspending operations due to an “uncertain regulatory framework.”
“We are committed to working with the Securities and Exchange Commission for more than two years, continually providing information and data to help regulators in any way we can,” Beaxy said.
The SEC said that exchange clients will be able to begin withdrawing their assets within 24 hours. The agency also advises users to fully withdraw their assets within 30 days.
Earlier, SEC Chairman Gary Gensler called on the government to allocate $2.4 billion to the agency to more effectively prosecute unregistered crypto companies. The SEC also warned investors about the risks of investing in crypto assets and urged them not to trust proof of reserves published by crypto exchanges.
Source: Bits
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