A United States Securities and Exchange Commission (SEC) accused the company of cryptocurrencies Beaxy.com and several executives for filing failures on Wednesday, expanding regulators’ efforts to rein in the industry.
A SEC accused a company based in Chicago behind Beaxy and certain affiliates to operate in various functions such as exchange, brokerage and clearing without registering with the regulatory agency. This structure, common throughout the cryptocurrency industry, is criticized by the SEC chairman for conflicts of interest and risks for investors.
Wednesday’s civil charges came a day after Beaxy said it had suspended its services “due to the uncertain regulatory environment surrounding our business.”
The SEC accused the company’s founder, Artak Hamazaspyan, of raising $8 million in an unregistered offering of the BXY token and misappropriating at least $900,000 for gambling and other personal uses.
Hamazaspyan did not immediately respond to a request for comment via LinkedIn.
“This case serves as yet another reminder to crypto intermediaries that their business models must comply with and adapt to the law, not the other way around,” SEC Chairman Gary Gensler said in a statement.
The agency’s action included charges against Windy Inc and its directors Nicholas Murphy and Randolph Bay Abbott for operating through Beaxy’s platform without being registered.
Another man, Brian Peterson, was accused of acting as an unregistered dealer in providing marketing services to Beaxy.
Windy, Murphy, Abbott and Peterson settled without wrongdoing and agreed to fines.
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