Crypto Founder Allegedly Uses Investor Funds For Gambling: SEC Charges Beaxy And Executives

The U.S. Securities and Exchange Commission (SEC) charged crypto platform Beaxy and its executives for violating securities laws by not registering as a broker, exchange or clearing agency.

Beaxy founder Artak Hamazaspyan and Beaxy Digital Ltd. were also charged for raising $8 million through an unregistered offering of the Beaxy token.

The SEC further claimed that Hamazaspyan allegedly used $900,000 of the raised funds for personal use, including gambling.

The SEC also charged executives Nicholas Murphy and Randolph Bay Abbott through their company Windy, which ran the platform.

In response, Windy, Murphy, Abbott and another individual agreed to cease all unregistered activities and shut down the Beaxy platform.

Also Read: On-Chain Data Reveals Crypto Profit-Taking Underway: Will Bitcoin, Ethereum And XRP Hold Up?

As per the agreement, the parties did not admit or deny the allegations.

The SEC is still pursuing securities fraud charges against Hamazaspyan and unregistered offering charges against Beaxy Digital.

According to Gurbir Grewal, director of the SEC’s Division of Enforcement, the charges against Beaxy and its executives are intended to protect investors from serious risks that arise when a crypto intermediary combines all the functions of an exchange, broker and clearing agency.

"To protect investors, there are separate registration requirements for exchanges, brokers and clearing agencies, with each essentially acting as a check on the other," he said.

Read Next: Shiba Inu, Ether And VGX Tokens: What's Happening With Voyager's Crypto Assets?

Photo: Shutterstock