SEC v. BEAXY DIGITAL, LTD.; ARTAK HAMAZASPYAN; WINDY INC.; NICHOLAS MURPHY; RANDOLPH BAY ABBOTT; BRAVEROCK INVESTMENTS, LLC, et al., No. 1:23-cv-1962, Northern District of Illinois (Apr. 3, 2023) — Complaint

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION,

Plaintiff,
v.

BEAXY DIGITAL, LTD., ARTAK
HAMAZASPYAN, WINDY INC.,
NICHOLAS MURPHY, RANDOLPH
BAY ABBOTT, BRAVEROCK
INVESTMENTS, LLC, FUTURE
DIGITAL MARKETS, INC., WINDY
FINANCIAL LLC, FUTURE FINANCIAL
LLC, and BRIAN PETERSON,

Defendants.

Civil Action No. 23-cv-1962

Jury Trial Demanded

COMPLAINT

Plaintiff United States Securities and Exchange Commission (the “SEC” or
“Commission”) files this Complaint against Defendants Beaxy Digital, Ltd. (“Beaxy Digital”),
Artak Hamazaspyan (“Hamazaspyan”), Windy Inc. (“Windy”), Nicholas Murphy (“Murphy”),
Randolph Bay Abbott (“Abbott”), Braverock Investments, LLC (“Braverock Investments”),
Future Digital Markets, Inc. (“Future Digital”), Windy Financial LLC (“Windy Financial”),
Future Financial LLC (“Future Financial”), and Brian Peterson (“Peterson”) and alleges as
follows:
SUMMARY
1. From approximately May 2018 through June 2019, Beaxy Digital and its founder

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Hamazaspyan conducted an unregistered “private sale” of a crypto asset security
1
 called BXY,
illegally raising over $8 million in proceeds through unregistered offers and sales of these
securities to approximately 200 crypto asset investors in the United States and abroad.
2. Beaxy Digital and Hamazaspyan undertook their offer and sale of BXY, which
were offered and sold as investment contracts and therefore as “securities” under the federal
securities laws, without registering these offers and sales of BXY with the SEC as required by
the federal securities laws.
3. In the BXY offering materials, which Hamazaspyan approved, Beaxy Digital
marketed BXY essentially as a so-called “exchange token” (a crypto asset associated with a
crypto asset trading platform). Here, Beaxy Digital described prospective BXY purchasers as
“investors” and said that Beaxy Digital would use the proceeds from the offering to develop,
market, and operate a crypto asset trading platform (hereinafter “the Beaxy Platform”), and tied
the value of BXY to the success of the Beaxy Platform and the efforts of Beaxy Digital’s
management.
4. Hamazaspyan’s representations about the use of proceeds from this unregistered
offering of BXY were false. In reality, during the BXY offering and for three months thereafter,
Hamazaspyan misappropriated at least $900,000 of the investment proceeds for his personal use,
including gambling.
5. In October 2019, Murphy and Abbott, who were high-level Beaxy Digital
personnel at the time but did not control the Beaxy Platform, discovered Hamazaspyan’s

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As used in this complaint, “crypto asset security” refers to an asset that is issued and/or transferred using
distributed ledger or blockchain technology – including, but not limited to, so-called “digital assets,” “virtual
currencies,” “coins,” and “tokens” – and that meets the definition of “security” under the federal securities laws.
“Security” includes any “investment contract,” “security-based swap,” or “receipt for” a security.

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misappropriation and convinced him to separate from all Beaxy Platform-affiliated entities.
6. As part of Hamazaspyan’s separation, Murphy and Abbot assumed control of the
Beaxy Platform and began operating it through Windy, an entity they acquired as part of the
same series of transactions.

7. From October 2019 to the present, Murphy and Abbott acted as control persons of
Windy and therefore controlled the Beaxy Platform.
8. From October 2019 to the present, Windy provided and maintained the Beaxy
Platform, which was open to the general public for use 24 hours a day, seven days a week, at the
internet address beaxy.com. The Beaxy Platform brought together the orders of multiple buyers
and sellers in crypto asset securities, using established, non-discretionary methods.  Despite
providing the Beaxy Platform as a market place for securities, Windy did not register as a
national securities exchange.
9. Further, from October 2019 to the present, Windy was not registered with the
SEC as a broker, even though Windy, among other things, was in the regular business of
effecting transactions in crypto asset securities at key points in the distribution chain for these
securities, by, among other things, actively soliciting and recruiting investors in these securities,
regularly advertising the Beaxy Platform, and receiving transaction-based compensation with
respect to these securities.
10. Additionally, from October 2019 to the present, Windy was not registered with
the SEC as a clearing agency, even though Windy, among other things, acted as a custodian of
securities by holding crypto asset securities as custodial assets for the Beaxy Platform’s
customers’ benefit in Windy-controlled wallets, where the assets were not segregated by
customer and only transferred to customers’ control following their instructions to withdraw the

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assets from the Beaxy Platform.
11. In February and September 2020, Murphy and Abbott oversaw the review,
removal from trading, and resumption of trading of various crypto assets that were offered and
sold as investment contracts and therefore as “securities” under the federal securities laws.
12. During this process, Murphy and Abbott failed to exclude or prevent trading of
crypto asset securities on the Beaxy Platform despite knowing facts demonstrating that the
crypto assets were in fact offered and sold as securities.
13. From approximately 2019 to the present, Braverock Investments, Future Digital,
Windy Financial, and Future Financial (collectively, the “Braverock Defendants”) provided
market making services to Windy and to Dragonchain, Inc. (“Dragonchain”), which was the
issuer of the crypto asset DRGN that was offered and sold as a security, to provide liquidity in
BXY and DRGN trading on the Beaxy Platform by offering to buy and sell these securities at
various prices and quantities, and using trading algorithms to execute market making trading
strategies, among other things, in exchange for flat monthly fees from Windy and Dragonchain.
The Braverock Defendants also engaged in the regular business of buying and selling BXY and
DRGN on various crypto asset trading platforms.
14. During all relevant times, Peterson owned and controlled the Braverock
Defendants, including their trading accounts. Neither Peterson nor the Braverock Defendants
were registered with the SEC as dealers in violation of the federal securities laws.
15. By engaging in the misconduct described here, Defendants violated numerous
provisions of the federal securities laws, including the antifraud, securities offering registration,
and exchange, broker-dealer, and clearing agency registration provisions as detailed below.
16. The SEC seeks to enjoin each of the Defendants in this action from future

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violations of the federal securities laws, and also seeks disgorgement of their ill-gotten gains,
along with prejudgment interest and civil penalties. The SEC also requests that the Court enter
(a) against Hamazaspyan an officer and director bar pursuant to Section 20(e) of the Securities
Act of 1933 (“Securities Act”), 15 U.S.C. § 77t(e), and Section 21(d)(2) of the Securities
Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78u(d)(2), and (b) an injunction
prohibiting Beaxy Digital and Hamazaspyan from participating, directly or indirectly, in any
securities offering; provided, however, that such injunction shall not prevent Hamazaspyan from
purchasing or selling securities other than BXY for his own personal account.
JURISDICTION AND VENUE
17. The Court has jurisdiction over this action pursuant to Section 20(b) and (d) of the
Securities Act, 15 U.S.C. § 77t(b) and (d), and Sections 21(d), 21(e), and 27 of the Exchange
Act, 15 U.S.C. §§ 78u(d), 78u(e), and 78aa. Defendants, directly and indirectly, have made use
of the means or instruments of transportation or communication in, and the means and
instruments of interstate commerce or of the mails, in connection with the transactions, acts,
practices, and courses of business alleged herein.
18. Venue is proper in this district pursuant to Section 22(a) of the Securities Act, 15
U.S.C. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. § 78aa, because Defendants
reside or transacted business in this district, and some of the transactions, acts, practices, and
courses of business constituting the securities violations alleged herein occurred within this
district.
DEFENDANTS
19.  Beaxy Digital, Ltd. (“Beaxy Digital”) is a Saint Kitts and Nevis corporation with
its former principal place of business in Chicago, Illinois. Beaxy Digital has not registered with

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the Commission in any capacity, nor has it ever registered any offering of securities under the
Securities Act.
20. Artak Hamazaspyan (“Hamazaspyan”), age 34, formerly of Chicago, Illinois,
was the founder, President, and a shareholder of Beaxy Digital and was the sole owner and
principal of Windy Blockchain Solutions LLC. A citizen of the Republic of Armenia,
Hamazaspyan relocated to Armenia in November 2020. Hamazaspyan has not registered with the
Commission in any capacity, nor has he ever registered any offering of securities under the
Securities Act.
21. Windy Inc. (“Windy”) is a Delaware corporation with its principal place of
business in Chicago, Illinois. Windy maintained and provided the Beaxy Platform to the public
from October 2019 to the present. Windy has not registered with the Commission in any
capacity, nor has it ever registered the Beaxy Platform with the Commission in any capacity.
22. Nicholas Murphy (“Murphy”), age 30, is a resident of Chicago, Illinois.
Together with Randolph Bay Abbott, he is co-owner and co-president of Windy. Murphy has not
registered with the Commission in any capacity, nor has he ever registered the Beaxy Platform
with the Commission in any capacity.
23. Randolph Bay Abbott (“Abbott”), age 30, is a resident of Chicago, Illinois.
Together with Murphy, he is co-owner and co-president of Windy. Abbott has not registered
with the Commission in any capacity, nor has he ever registered the Beaxy Platform with the
Commission in any capacity.
24. Brian Peterson (“Peterson”), age 51, is a resident of Riverside, Illinois. He owns
and controls Braverock Investments, Future Digital Markets, Windy Financial, and Future
Financial. Peterson has not registered with the Commission in any capacity, nor has he ever

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registered any of the Braverock Defendants with the Commission in any capacity.
25. Braverock Investments, LLC (“Braverock Investments”) is an Illinois company
with its principal place of business in Chicago, Illinois that provided market making services in
crypto asset securities. Braverock Investments has not registered with the Commission in any
capacity.
26. Future Digital Markets, Inc. (“Future Digital”) is an Armenian corporation with
its principal place of business in Chicago, Illinois that provided market making services in crypto
asset securities. Future Digital has not registered with the Commission in any capacity.
27. Windy Financial LLC (“Windy Financial”) is a Delaware company with its
principal place of business in Chicago, Illinois that provided market making services in crypto
asset securities. Windy Financial has not registered with the Commission in any capacity.
28. Future Financial LLC (“Future Financial”) is a Delaware company with its
principal place of business in Chicago, Illinois that provided market making services in crypto
asset securities. Future Financial has not registered with the Commission in any capacity.
OTHER RELEVANT INDIVIDUALS AND ENTITIES
29. Windy Blockchain Solutions LLC (“Windy Blockchain”) is an Illinois company
with its principal place of business in Chicago, Illinois, which was involuntarily dissolved by the
State of Illinois on September 29, 2020.
30. Dragonchain is a Washington corporation with its principal place of business in
Bellevue, Washington. It markets and purports to develop Dragonchain technology and
“ecosystem.” On August 16, 2022, the SEC filed a civil action against Dragonchain and others
alleging that they conducted an unregistered offering of the crypto asset security DRGN. SEC v.
Dragonchain, Inc., 2:22-cv-01145 (W.D. Wash.).

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31. Chicago Crypto Capital LLC (“CCC”) is an Illinois limited liability company
with its headquarters in Chicago, Illinois. CCC sells crypto assets and markets other blockchain-
related investments. On September 14, 2022, the SEC filed a civil action against CCC and others
alleging that they conducted an unregistered securities offering of BXY, acted as unregistered
brokers, and engaged in securities fraud. SEC v. Chicago Crypto Capital LLC, 1:22-cv-04975
(N.D. Ill.).
BACKGROUND ON CRYPTO ASSETS AND
CRYPTO ASSET TRADING PLATFORMS

32. The term “crypto asset” refers to an asset issued and/or transferred using
distributed ledger or blockchain technology, including assets sometimes referred to as “digital
assets,” “cryptocurrencies,” digital “coins,” and digital “tokens.”
33. A blockchain or distributed ledger is a database spread across a network of
computers that records all transactions in theoretically unchangeable, digitally recorded data
packages. The system relies on cryptographic techniques for secure recording of transactions.
34. Crypto assets are typically represented in one or more blockchains, meaning that
records of their ownership and transfer are stored on each particular digital ledger or blockchain.
35. In regulatory compliant securities markets, participants register under the
Exchange Act depending upon which of the various activities they undertake – including, for
example, registration as a national securities exchange, as a broker-dealer, or as a clearing
agency for securities. These functions are delineated to, among other things, provide
Commission oversight and protect investors and their assets from conflicts and potential abuses
that may arise when investors buy and sell securities.
36. Generally speaking, crypto asset platforms offer a variety of services relating to
crypto assets, often including brokerage, trading, settlement, and custody. Crypto asset trading

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platforms typically allow crypto assets to be bought and sold with fiat currency (legal tender
issued by a governmental authority) or other crypto assets. Platforms might settle transactions
“on-chain” (i.e., by making transfers of assets from one blockchain address to another) or “off-
chain” (i.e., solely by making allocations between investors’ accounts held by the platform).
37. Crypto asset trading platforms like the Beaxy Platform may offer and sell crypto
assets they call “exchange tokens,” a crypto asset typically marketed as an investment in the
platform’s promoters’ efforts to make the platform a success, including as an opportunity to trade
more profitably on the platform.
38. These platforms may provide marketplaces and facilities that bring together
purchasers and sellers of securities
 like registered national securities exchanges do, and similarly
display orders, establish rules for order interaction, and provide methods to match orders of
buyers and sellers.
39. As currently operating, crypto asset trading platforms, including the Beaxy
Platform, frequently perform multiple functions that require separate registration and, in
compliant securities markets, are handled by separate registered entities – exchanges, broker-
dealers, and clearing agencies.
40. For example, as further set forth below, the Beaxy Platform sought to generate
customers’ awareness of and interest in crypto assets, solicited customers for the purpose of
effecting transactions in securities on their behalf, and accepted orders in securities from those
customers. The Beaxy Platform also established and maintained functionality to match the orders
in securities of multiple buyers and sellers, resulting in purchases and sales. Finally, the Beaxy
Platform maintained a central securities depository for the settlement of securities transactions
and acted as an intermediary in making payments or deliveries or both in connection with

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transactions in securities effected on the Beaxy Platform.
41. Moreover, platforms like the Beaxy Platform require users to deposit with the
platform all of the crypto asset securities that they traded there, resulting in the platform
possessing, and even becoming the legal owner of such assets and thus a central securities
depository. This type of arrangement means that an unregistered crypto asset platform like the
Beaxy Platform could use assets in their possession and control for its own purposes, thereby
exposing investors to significant and at times undisclosed risk of loss of their assets. Investors
who invest through such a platform may face a risk that, if the platform were to enter
bankruptcy, they might not be able to withdraw their assets and would become unsecured
creditors of the bankruptcy estate.
42. On national securities exchanges, by contrast, investors interact through broker-
dealer intermediaries that effect transactions in securities on behalf of investors. The exchange
does not take possession or control of the underlying assets being traded.
43. The Beaxy Platform also performed a settlement function when it updated its
internal ledger of each investor’s positions following execution of a trade. In the regulated
securities markets, this settlement typically is carried out by clearing agencies.
44. The Beaxy Platform, as further set forth below, also performed functions
traditionally performed by broker-dealers in traditional securities markets, without registering as
a broker-dealer and thereby subjecting itself to the legal obligations and restrictions on activities
that accompany status as a broker or dealer.
45. The Beaxy Platform also had the ability to trade crypto asset securities against its
own customers, which gives it the means and the motive to put itself on the winning side of each
trade, without regard to obligations that apply to registered broker-dealers.

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46. On July 25, 2017, the SEC issued the Report of Investigation Pursuant to Section
21(a) of the Securities Exchange Act of 1934: The DAO (the “DAO Report”), advising “those
who would use . . . distributed ledger or blockchain-enabled means for capital raising[] to take
appropriate steps to ensure compliance with the U.S. federal securities laws,” and finding that the
offering of digital assets at issue in the DAO Report were investment contracts and, therefore,
securities.
47. The DAO Report also advised that “any entity or person engaging in the activities
of an exchange must register as a national securities exchange or operate pursuant to an
exemption from such registration,” and “stress[ed] the obligation to comply with the registration
provisions of the federal securities laws with respect to products and platforms involving
emerging technologies and new investor interfaces.” The DAO Report also found that the
platforms at issue there “provided users with an electronic system that matched orders from
multiple parties to buy and sell [the crypto asset securities at issue] for execution based on non-
discretionary methods” and therefore “appear to have satisfied the criteria” for being an
exchange under the Exchange Act.
FACT ALLEGATIONS
A. Beaxy Digital Issued Beaxy Crypto Assets.
48. In or around 2018, Beaxy Digital sought to develop the Beaxy Platform, a web-
based system for carrying out multiple functions with respect to crypto assets, which it planned
to launch in 2019.
49. At that time, Hamazaspyan controlled the majority of Beaxy Digital’s outstanding
shares and was the final decision-maker with regard to Beaxy Digital and the Beaxy Platform.
50. At that time, Hamazaspyan also controlled Windy Blockchain, a company whose

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bank account he used to receive deposits of Beaxy Digital’s investment proceeds and pay for
Beaxy Digital’s business expenditures.
51. To fund the development of the Beaxy Platform and related applications, Beaxy
Digital began selling BXY, offered and sold as security, in approximately 2018. BXY purchasers
invested in a common enterprise with an expectation of profits derived from the efforts of others.
52. Specifically, from January 2018 through June 2019, Beaxy Digital conducted a
so-called “private sale” of yet-to-be created BXY in the form of so-called “Simple Agreements
for Future Tokens,” which were executed by Hamazaspyan in his capacity as the President of
Beaxy Digital.
53. The offering raised approximately $8 million worth of bitcoin, ether, and fiat
currency from approximately 200 investors, including investors in the United States.
54. During this “private sale,” Beaxy Digital offered BXY at various discounts, which
fluctuated over time and based on the amount purchased.
B. Beaxy Digital and Hamazaspyan Marketed BXY by Promoting its Profit Potential
as Tied to the Success of the Beaxy Platform.
55. Beaxy Digital and Hamazaspyan identified “private sale” purchasers through
Hamazaspyan’s business relationships as well as through their own public marketing and
marketing by crypto asset influencers retained by Beaxy Digital and Hamazaspyan. They
targeted their marketing efforts to persons who would seek to derive profit from the increase in
BXY’s trading value.
56. Beaxy Digital also engaged at least one third-party reseller, CCC, to solicit
investors.
57. Beaxy Digital’s offering materials to the “private sale” purchasers (“Offering
Materials”), which Hamazaspyan approved and directed to be distributed, stated that crypto

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assets issued by “exchanges” had been the most profitable initial coin offerings in 2018 and that
“exchanges are where the profits are.”
58. With statements such as these, Beaxy Digital and Hamazaspyan sought to entice
“private sale” purchasers to buy BXY by pointing out that they will be able to profit from the
future increase in the price of BXY.
59. The Offering Materials also stated that BXY was “speculative,” and made other
representations that the value of BXY was tied to Beaxy Digital’s ability to operate a profitable
crypto asset platform.
60. The Offering Materials stated that the BXY sales proceeds would be pooled and
used to develop the Beaxy Platform. For example, the Offering Materials specified that the
offering proceeds would be used to develop the Beaxy Platform infrastructure, operations,
marketing, customer support, and legal and regulatory compliance. The Offering Materials also
stated that Beaxy Digital would reserve 40% of all BXY to be able to “operate for up to 2 years
without making a profit.”
61. By publicly stating that Beaxy Digital would reserve nearly half of all BXY,
Beaxy Digital signaled to reasonable investors that Beaxy Digital had a strong financial incentive
to undertake efforts to increase BXY’s value.
62. Neither Beaxy Digital nor Hamazaspyan set up separate or segregated accounts to
manage BXY investors’ assets. To the contrary, as noted, the Offering Materials stated that
Beaxy Digital would pool proceeds and use them fungibly to develop the Beaxy Platform.
63. In its publicly-available “Whitepaper,” a document commonly used by crypto
asset projects to describe its technical and operational plans, Beaxy Digital touted the credentials
and experience of its team. Specifically, the Beaxy Whitepaper described Hamazaspyan as “the

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‘founding father’ of Beaxy” who “has worked 10 years in software development” and had “prior
experience in leading businesses.”
64. The Beaxy Whitepaper also described several Beaxy Digital software developers
and engineers as team members with over 10 years of development experience each and
highlighted their software and computer engineering degrees.
65. The Beaxy Whitepaper also highlighted the Beaxy Digital business personnel’s
training and “expert[ise]” in “helping businesses grow quickly.”
66. After launching the Beaxy Platform in June 2019, Beaxy Digital and
Hamazaspyan sought to attract “traditional traders, retail investors and institutional investors” to
trade crypto assets on the Beaxy Platform. They, therefore, sought to attract the types of
purchasers who buy crypto assets for investment purposes.
67. In addition to reviewing and approving these materials, Hamazaspyan personally
participated in solicitation meetings with investors.
68. As stated in Beaxy Digital’s marketing materials, users could opt to pay their
Beaxy Platform trading fees in BXY at a discounted rate or to use other crypto assets.
C. Beaxy Digital and Hamazaspyan Sold BXY to Unaccredited Crypto Investors.
69. In its Offering Materials, Beaxy Digital stated that the “private sale” of BXY was
limited to non-U.S. persons or accredited U.S. investors.
70. In the offering, however, Beaxy Digital and Hamazaspyan directed selling efforts
into the U.S. and sold BXY to U.S. persons. U.S. investors purchased BXY during the sale and at
least some of the purchasers signed forms self-certifying that they were either “accredited” or
“foreign investors.”
71. Beaxy Digital did not have any processes or controls in place – and took no steps

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– to verify the investors’ accreditation status.
72. In fact, Beaxy Digital explicitly instructed a CCC salesperson to seek investments
from non-accredited U.S. investors, which the salesperson did by posting solicitation messages
on social media.
D. Beaxy Digital and Hamazaspyan Placed No Restrictions on Resale of BXY.
73. Beaxy Digital did not take any steps to limit resales of BXY by the “private sale”
purchasers, and did not require investors to hold their BXY for any period of time after purchase.
74. Beaxy Digital and Hamazaspyan also facilitated trading in BXY by making them
available to trade on the Beaxy Platform.
75. BXY sold in the original offering and on the Beaxy Platform were all fungible
with each other, and each investor’s pro rata ownership of BXY rose or decreased in value
together with all other investors’ ownership of BXY.
76. Moreover, immediately before the public launch of the Beaxy Platform,
Hamazaspyan instructed the development team to ensure that the platform could handle a large
volume of transactions because: (1) he expected purchasers to be selling the discounted BXY
they obtained in the “private sale”; and (2) the Beaxy Platform was the only place where
purchasers could trade BXY.
77. Beaxy Digital also hired market makers to provide liquidity for BXY trading and
provided the market makers with a pool of BXY to facilitate liquidity.
78. Beaxy Digital allowed all private sale purchasers to sell their BXY on the Beaxy
Platform without any restrictions as to the accredited or foreign status of the purchasers.
E. Hamazaspyan Misappropriated Offering Proceeds.
79. As noted, in the BXY Offering Materials, which Hamazaspyan approved, Beaxy

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Digital informed its investors that it would use the proceeds to develop, market, and operate the
Beaxy Platform and explicitly tied the value of BXY to the success of the Beaxy Platform and
the efforts of Beaxy Digital’s management.
80. Hamazaspyan’s representations about the use of proceeds were false. In reality,
between March and August 2019, Hamazaspyan made ten cash withdrawals totaling $900,000
from Windy Blockchain’s bank account, which had been funded by proceeds from the 2018 and
2019 private sales of BXY to investors.
81. Hamazaspyan used these funds for his personal use, including gambling. By
misappropriating offering proceeds, Hamazaspyan acted knowingly or recklessly and with the
intent to defraud BXY investors.
F. Murphy and Abbott Took Control of the Beaxy Platform.
82. When Hamazaspyan’s misappropriation was discovered in 2019, Murphy and
Abbott, managers at Beaxy Digital at the time, convinced Hamazaspyan to separate from all
Beaxy-affiliated entities, relinquish control over all of the Beaxy Platform’s business, including
business bank and crypto asset accounts and wallets, and pay back $420,000 (out of the $900,000
that Hamazaspyan misappropriated) to Windy and Beaxy Digital, thereby leaving $480,000 of
the misappropriated funds outstanding.
83. As part of Hamazaspyan’s separation, Murphy and Abbott received full control
over Windy and began operating the Beaxy Platform through Windy.
84. As a result, from October 2019 to the present, Murphy and Abbott acted as
control persons of Windy and the Beaxy Platform.
85. In October and November 2019, Murphy and Abbott used the funds received
from Hamazaspyan, as well as a loan from a third party, to continue operating the Beaxy

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Platform.
G. Windy Maintained and Provided the Beaxy Platform as an Unregistered Exchange.
86. From October 2019 to the present, Windy operated the Beaxy Platform from the
internet address beaxy.com 24 hours per day, seven days per week, and had support staff
available on social media platforms during those hours.
87. At its height, the Beaxy Platform had a total of approximately 2,300 users,
approximately 855 of whom were located in the United States, and over the course of its history
has executed over 1 million transactions.
88. The Beaxy Platform website and other marketing materials stated that the Beaxy
Platform was an “exchange” that sought to attract “traditional traders, retail investors and
institutional investors” as users.
89. Through the Beaxy Platform, Windy brought together the orders of multiple
buyers and sellers for crypto assets securities, including BXY.
90. Users were allowed to enter on the Beaxy Platform limit orders, market orders,
and stop-market orders, with time in-force instructions or other parameters such as fill-or-kill,
immediate-or-cancel, good-till-cancelled, good-till-date, and good-till-crossing.
91. The Beaxy Platform allowed users to purchase crypto asset securities in exchange
for both fiat funds and other crypto assets.
92. The Beaxy Platform displayed to all of its users orders of crypto asset securities
that rested in the Beaxy Platform order book. Order information displayed to users from the
order book included the crypto asset security, side, size, and price.
93. The Beaxy Platform included a trading facility through its software-based
automated matching engine. The matching engine was programmed with rules that determined

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how orders would interact and allowed users entering such orders to agree to the terms of a trade.
For example, an order entered into the matching engine would match with an order resting on the
order book based on a price-time priority basis. The Beaxy Platform also had publicly-available
“Trading Rules” that governed order size, execution, and pricing.
94. Accordingly, Windy used established, non-discretionary methods through the
provision of the Beaxy Platform order matching trading facility.
95. Before a user could trade on the Beaxy Platform, the Beaxy Platform required the
user to deposit with it any fiat funds or crypto assets that the user wished to trade.
96. The Beaxy Platform kept all fiat funds in bank accounts that Windy controlled,
and kept crypto assets being transacted in wallets Windy controlled, rather than in the users’ own
wallets.
97. When a transaction took place, the Beaxy Platform carried out “off-chain
settlement.” In other words, it adjusted the user balances on its internal ledger and only
transferred crypto assets through a blockchain transaction when a user requested a withdrawal.
98. On beaxy.com, Windy described how transactions and user balances worked as
follows: (1) the Beaxy Platform held customers’ assets (both funds and crypto asset securities) in
bank accounts and digital wallets Windy controlled; (2) it held such assets as “custodial assets ...
for [its customers’] benefit”; (3) the assets were “not segregated” by customer, but tracked on
“separate ledgers”; and (4) an algorithm would “settle filled orders immediately, by modifying
the appropriate [crypto asset] balances in users’ accounts accordingly.”
99. Accordingly, Windy held custody of all assets and fiat funds on behalf of its users
until the user requested withdrawals of such assets and funds.
100. Through beaxy.com and social media channels, Windy, Murphy, and Abbott

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solicited investors to purchase crypto asset securities.
101. The Beaxy Platform charged a fee on each transaction it executed, and these fees
flowed directly to Windy, constituting Windy’s revenue.
102. To date, Windy has received $10,779 that the Beaxy Platform collected as
transaction fees in connection with transactions involving crypto asset securities.
103. Despite providing and maintaining the Beaxy Platform as a marketplace for
crypto asset securities, Windy did not register as a national securities exchange.
H. Windy Reviewed Crypto Assets Offered and Sold on the Beaxy Platform.
104. In February and September 2020, Murphy and Abbott oversaw and managed a
review of certain crypto assets offered by the Beaxy Platform to determine whether to allow
them to continue trading.
105. During this process, Windy removed several crypto assets, primarily due to the
low volume of trading in these crypto assets.
106. Windy asked the issuers of these crypto assets to reapply for the assets to be made
available on the Beaxy Platform by responding to a questionnaire and retaining a market maker
that would provide liquidity for their crypto asset on the Beaxy Platform.
107. As a result of this process, in 2020, Windy removed certain crypto assets from the
Beaxy Platform, including DRGN.
108. Dragonchain reapplied to Windy to add DRGN back on the Beaxy Platform.
Attached to Dragonchain’s application was a memorandum that concluded that DRGN was not a
security as long as Dragonchain would “avoid soliciting and participating in the creation of a
secondary marketplace for [DRGN] so as to decrease the likelihood that prospective purchasers
would be found to have a reasonable expectation for profits using such a marketplace,” and as

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long as Dragonchain’s Offering Materials would target purchasers with technical ability to use
DRGN for its “utility.”
109. Murphy and Abbott generally participated in the discussions with Dragonchain
about its application, were copied on the email attaching this reapplication memorandum, and
Abbott signed the agreement on behalf of Windy.
110. As a result of this process, in the summer of 2020, Windy added back DRGN to
the Beaxy Platform.
111. Neither Windy, Murphy, nor Abbott took any steps to confirm whether
Dragonchain in fact limited its offerings of DRGN to users with any specific technical ability, as
the memorandum specified.
112. Throughout this process, Windy, Murphy, and Abbott never undertook any
analysis or made any explicit decision as to whether to remove BXY from the Beaxy Platform.
113. As a result, BXY continued to trade on the Beaxy Platform after Murphy and
Abbott took over its operation.
114. As of 2023, the crypto asset securities BXY and DRGN, among others, were still
available for trading on the Beaxy Platform.
I. Windy Acted as an Unregistered Broker.
115. Windy was not registered with the SEC as a broker-dealer at any time.
116. Windy was engaged in a regular business of effecting transactions in crypto asset
securities for the account of others, participating in over a million transactions on behalf of at
least 2,300 customers that occurred “at key points in the chain of distribution.”
117. Namely, Windy actively solicited and recruited investors by regularly advertising
the features of the Beaxy Platform on beaxy.com and social media channels.

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118. Moreover, as described above, Windy helped to facilitate those transactions by
assisting customers in opening accounts and regularly handled customer funds and securities, as
described above.
119. For these services, the Beaxy Platform charged a fee on each transaction it
executed and these fees flowed directly to Windy.
120. By engaging in these activities, Windy was acting as an unregistered broker.
J. Windy Acted as an Unregistered Clearing Agency.
121. Windy was not registered with the SEC as a clearing agency at any time.
122. According to the Beaxy Platform’s terms and conditions made available on its
website and provided to users, Windy held all crypto asset securities as “custodial assets for [its
customers’] benefit” in Windy-controlled wallets, where they were “not segregated” by
customer.
123. When a transaction was executed, Windy settled the transaction using
bookkeeping entries that simply adjusted its “separate ledgers” for each crypto asset and
modified “balances in users’ accounts,” rather than moving the assets
 on the blockchain.
124. The terms and conditions also stated that Windy allowed users to create fiat
currency accounts for funding purchases of crypto asset securities and digital asset accounts for
holding such crypto asset securities. As noted above, the Beaxy Platform settled transactions off-
chain.
125. By engaging in these activities, Windy acted as an unregistered clearing agency.
K. Peterson and the Braverock Defendants Acted as Unregistered Dealers.
126. Neither Peterson nor the Braverock Defendants were registered as dealers with
the SEC.

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127. Peterson, through the Braverock Defendants, engaged in a regular business of
buying and selling securities for its own account.
128. In December 2019, the Braverock Defendants, which are owned and controlled by
Peterson, executed a market making agreement with Windy.
129. The agreement stated that Windy sought “to have more influence over the shape
of [BXY’s] liquidity” and was retaining Braverock Defendants “to trade on agency basis on
[Windy’s] behalf.”
130. According to the agreement, Braverock Defendants would utilize Windy’s staff,
servers, email accounts, and capital and provide Braverock Defendants’ intellectual property in
the form of market making algorithmic software and expertise in order to make markets for
BXY.
131. Windy also provided Braverock Defendants with the crypto assets with which
Braverock Defendants could provide liquidity for BXY.
132. In exchange for its market making services, Windy agreed to pay Braverock
Defendants a flat monthly fee of $10,000, but these payments would be deferred until Windy
became “cash flow positive,” which has yet to happen.
133. Although the crypto assets with which Braverock Defendants made markets for
BXY were owned by Windy, Braverock Defendants used accounts in the name of Braverock
Defendants for all the trades they executed on the Beaxy Platform.
134. Similarly, in May 2020, Dragonchain executed a market making agreement with
one of the Braverock Defendants, Windy Financial.
135. Dragonchain executed the agreement because Windy requested Dragonchain to
retain a market maker in order to increase the volume of transactions in DRGN on the Beaxy

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Platform. Windy recommended that Dragonchain retain Windy Financial as its market maker.
136. The agreement stated that Dragonchain sought “market making services ... to
ensure predictability to the liquidity” in DRGN trading. Pursuant to the agreement, Dragonchain
paid Windy Financial a flat monthly fee of $2,000 and Dragonchain provided all assets with
which Windy Financial would trade.
137. Windy Financial made markets for DRGN on the Beaxy Platform by trading out
of accounts in its own name.
138. To date, Windy Financial received approximately $52,000 in monthly fees from
Dragonchain.
139. For both BXY and DRGN, Peterson and the Braverock Defendants set up
algorithms that created and controlled trading accounts on multiple crypto asset trading
platforms, including the Beaxy Platform. The algorithm was designed to enter orders to buy or
sell BXY and DRGN at a variety of prices and volumes, and supported liquidity of the two
crypto assets because it allowed other Beaxy Platform users interested in buying or selling these
assets to find a counter-party even when other users were less active in these assets.
140. The orders entered by the market maker were not identified as involving a market
maker in the order books. Therefore, a Beaxy Platform user would not know whether, in a
particular transaction, they were transacting with a market maker or another user.
141. As a result of this conduct, Peterson and the Braverock Defendants acted as
unregistered dealers.
COUNT I

Violations of Section 5(a) and (c) of the Securities Act
(against Defendants Beaxy Digital and Hamazaspyan)

142. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through

24
141, as though fully set forth therein.
143. By reason of the acts and conduct described in this Complaint, Defendants Beaxy
Digital and Hamazaspyan, directly or indirectly, singly and in concert with others, have: (a)
made use of the means and instruments of transportation or communication in interstate
commerce and of the mails to sell, through the use or medium of any prospectus or otherwise,
securities as to which no registration statement was in effect; and/or (b) for the purpose of sale or
delivery after sale, carried and caused to be carried through the mails and interstate commerce,
by the means and instruments of transportation, securities as to which no registration statement
was in effect; and/or (c) made use of the means and instruments of transportation or
communication in interstate commerce and of the mails to offer to sell, through the use or
medium of any prospectus or otherwise, securities as to which no registration statement had been
filed.
144. By reason of the foregoing, Defendants Beaxy Digital and Hamazaspyan, directly
or indirectly, violated, are violating, and, unless enjoined, will continue to violate Section 5(a)
and (c) of the Securities Act, 15 U.S.C. § 77e(a) and (c).
COUNT II

Violations of Exchange Act Section 10(b) and Rule 10b-5
(against Defendant Hamazaspyan)

145. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through
141, as though fully set forth therein.
146. By reason of the acts and conduct described in this Complaint, Defendant
Hamazaspyan, directly or indirectly, in connection with the purchase or sale of securities, by the
use of means or instrumentalities of interstate commerce or of the mails: (a) used and employed
devices, schemes, or artifices to defraud; (b) made untrue statements of a material fact or omitted

25
to state material facts necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading; and (c) engaged in acts, practices,
or courses of business which operated or would operate as a fraud and deceit upon any person.
147. Defendant Hamazaspyan intentionally or recklessly engaged in the fraudulent
conduct described above.
148. By reason of the foregoing, Defendant Hamazaspyan, directly or indirectly,
violated, is violating, and, unless enjoined, will continue to violate Section 10(b) of the Exchange
Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder.
COUNT III

Violations of Securities Act Section 17(a)
(against Defendant Hamazaspyan)
149. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through
141, as though fully set forth therein.
150. By engaging in the acts and conduct described in this Complaint, Defendant
Hamazaspyan, directly or indirectly, in the offer or sale of securities, by use of the means or
instruments of transportation or communication in interstate commerce or by use of the mails: (a)
employed devices, schemes, and artifices to defraud; (b) obtained money or property by means
of untrue statements of material facts or omissions to state material facts necessary in order to
make the statements made, in light of the circumstances under which they were made, not
misleading; and (c) engaged in transactions, practices, and courses of business which operated or
would operate as a fraud or deceit upon purchasers or prospective purchasers.
151. Defendant Hamazaspyan intentionally, recklessly, or negligently engaged in the
fraudulent conduct described above.

26
152. By reason of the foregoing, Defendant Hamazaspyan, directly or indirectly,
violated, is violating, and, unless enjoined, will continue to violate Section 17(a) of the Securities
Act, 15 U.S.C. § 77q(a).
COUNT IV

Violations of Exchange Act Section 5
(against Defendant Windy)

153. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through
141, as though fully set forth therein.
154. By engaging in the acts and conduct described in this Complaint, Defendant
Windy, an exchange, directly or indirectly, made use of the mails and the means and
instrumentalities of interstate commerce for the purpose of using any facility of an exchange
within or subject to the jurisdiction of the United States to effect and report transactions in a
security without being registered as national securities exchange under Exchange Act Section 6,
15 U.S.C. § 78f.
155. By reason of the foregoing, Defendant Windy, directly or indirectly, violated, is
violating, and, unless enjoined, will continue to violate Exchange Act Section 5, 15 U.S.C. § 78e.
COUNT V

Violations of Exchange Act Section 15(a)
(against Defendant Windy)
156. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through
141, as though fully set forth therein.
157. By engaging in the acts and conduct described in this Complaint, Defendant
Windy, a person other than a natural person under the Exchange Act, is a broker by and made
use of the mails and the means and instrumentalities of interstate commerce to effect any

27
transactions in, or to induce or attempt to induce the purchase or sale of, any security, without
registering as a broker-dealer.
158. By reason of the foregoing, Defendant Windy, directly or indirectly, violated, is
violating, and, unless enjoined, will continue to violate Exchange Act Section 15(a), 15 U.S.C.
§ 78o(a).
COUNT VI

Violations of Exchange Act Section 17A
(against Defendant Windy)

159. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through
141, as though fully set forth therein.
160. By engaging in the acts and conduct described in this Complaint, Defendant
Windy, directly or indirectly, made use of the mails and the means and instrumentalities of
interstate commerce to perform the functions of a clearing agency with respect to securities,
without registering in accordance to Section 17A(b) of the Exchange Act.
161. By reason of the conduct described above, Defendant Windy, directly or
indirectly, violated, is violating, and, unless enjoined, will continue to violate Exchange Act
Section 17A(b), 15 U.S.C. § 78q-1.
COUNT VII

Violations of Exchange Act Sections 5, 15(a), and 17A(b)
(against Defendants Murphy and Abbott as Control Persons over Defendant Windy)

162. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through
141, as though fully set forth therein.
163. As alleged above, Defendant Windy violated Sections 5, 15(a), and 17A of the
Exchange Act, 15 U.S.C. §§ 78e, 78o(a), 78q-1.

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164. At all relevant times, Defendants Murphy and Abbott were control persons of
Defendant Windy for purposes of Section 20(a) of the Exchange Act, 15 U.S.C. § 78t(a).
165. At all relevant times, Defendants Murphy and Abbott exercised power and control
over Defendant Windy, including by managing and directing that entity, and by directing and
participating in the acts constituting Defendant Windy’s violations of the securities laws.
166. By reason of the foregoing, Defendants Murphy and Abbott are liable as control
persons under Section 20(a) of the Exchange Act, 15 U.S.C. § 78t(a), for Defendant Windy’s
violations of the Sections 5, 15(a), and 17A of the Exchange Act, 15 U.S.C. §§ 78e, 78o(a),
78q-1.
COUNT VIII

Violations of Exchange Act Section 15(a)
(against Defendants Peterson, Braverock Investments,
Future Digital, Windy Financial, and Future Financial)

167. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through
141, as though fully set forth therein.
168. By engaging in the acts and conduct described in this Complaint, Defendant
Peterson, a natural person under the Exchange Act, and Defendants Braverock Investments,
Future Digital, Windy Financial, and Future Financial, persons other than natural persons under
the Exchange Act, are dealers and made use of the mails and the means and instrumentalities of
interstate commerce to effect any transactions in, or to induce or attempt to induce the purchase
or sale of, any security, without registering as dealers.
169. By reason of the foregoing, Defendants Peterson, Braverock Investments, Future
Digital, Windy Financial, and Future Financial, directly or indirectly, violated, are violating, and,
unless enjoined, will continue to violate Exchange Act Section 15(a), 15 U.S.C. § 78o(a).

29
PRAYER FOR RELIEF
         WHEREFORE, the SEC respectfully requests that the Court:
I.
Find that Defendants committed the violations alleged herein;
II.
Issue orders of permanent injunction restraining and enjoining Defendants Beaxy Digital,
Hamazaspyan, Murphy, Abbott, Windy, Braverock Investments, Future Digital, Windy
Financial, Future Financial, and Peterson, as well as their offers, agents, servants, employees,
attorneys, and those persons in active concert or participation with them, from directly or
indirectly violating the statutes and rules set forth in this Complaint as to each;
III.
Issue orders of permanent injunction, pursuant to Section 21(d)(5) of the Exchange Act,
15 U.S.C. § 78u(d)(5), restraining and enjoining each of Defendants Beaxy Digital and
Hamazaspyan from participating, directly or indirectly, in any securities offering; provided,
however, that such injunction shall not prevent Defendant Hamazaspyan from purchasing or
selling securities other than BXY for his own personal account;
IV.
Order Defendants Beaxy Digital, Hamazaspyan, Windy, Braverock Investments, Future
Digital, Windy Financial, Future Financial, and Peterson to disgorge all ill-gotten gains derived
from their illegal conduct as set forth in this Complaint, including prejudgment interest thereon
pursuant to Section 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act, 15 U.S.C. § 78u(d)(3),
(d)(5), and (d)(7);

30
V.
Order Defendants Beaxy Digital, Hamazaspyan, Murphy, Abbott, Windy, Braverock
Investments, Future Digital, Windy Financial, Future Financial, and Peterson to pay civil
penalties pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section
21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3);
VI.

Pursuant to Section 20(e) of the Securities Act, 15 U.S.C. § 77t(e), and Section 21(d)(2)
of the Exchange Act, 15 U.S.C. § 78u(d)(2), prohibit Defendant Hamazaspyan from serving as
an officer or director of any issuer that has a class of securities registered under Section 12 of the
Exchange Act, 15 U.S.C. § 78l, or that is required to file reports under Section 15(d) of the
Exchange Act, 15 U.S.C. § 78o(d);
VII.
Grant such other and further relief as the Court determines to be necessary and
appropriate for the protection of investors; and
VIII.
Retain jurisdiction over this action to implement and carry out the terms of all orders and
decrees that may be entered.

31
JURY TRIAL DEMAND

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff SEC demands that
this case be tried to a jury.
Date:    March 29, 2023   Respectfully submitted,

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION

      /s/ Alyssa A. Qualls
           Alyssa A. Qualls ([email protected])
                                                                        Arsen            R.            Ablaev            ([email protected])
                                                                        Christine            B.            Jeon            ([email protected])
                                                            Chicago            Regional            Office
          175 West Jackson Blvd., Suite 1450
          Chicago, Illinois 60604
          Phone: (312) 353-7390 | Fax: (312) 353-7398

     Attorneys for Plaintiff

UNITED STATES DISTRICT COURT 
NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 
 
 
UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION, 
 

Plaintiff, 
v. 

 
BEAXY DIGITAL, LTD., ARTAK 
HAMAZASPYAN, WINDY INC., 
NICHOLAS MURPHY, RANDOLPH 
BAY ABBOTT, BRAVEROCK 
INVESTMENTS, LLC, FUTURE 
DIGITAL MARKETS, INC., WINDY 
FINANCIAL LLC, FUTURE FINANCIAL 
LLC, and BRIAN PETERSON, 
 

Defendants. 
 

 
 
 
Civil Action No. 23-cv-1962 
 
 
Jury Trial Demanded 

 
COMPLAINT 

 
Plaintiff United States Securities and Exchange Commission (the “SEC” or 

“Commission”) files this Complaint against Defendants Beaxy Digital, Ltd. (“Beaxy Digital”), 

Artak Hamazaspyan (“Hamazaspyan”), Windy Inc. (“Windy”), Nicholas Murphy (“Murphy”), 

Randolph Bay Abbott (“Abbott”), Braverock Investments, LLC (“Braverock Investments”), 

Future Digital Markets, Inc. (“Future Digital”), Windy Financial LLC (“Windy Financial”), 

Future Financial LLC (“Future Financial”), and Brian Peterson (“Peterson”) and alleges as 

follows: 

SUMMARY 

1. From approximately May 2018 through June 2019, Beaxy Digital and its founder 

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2 

Hamazaspyan conducted an unregistered “private sale” of a crypto asset security1 called BXY, 

illegally raising over $8 million in proceeds through unregistered offers and sales of these 

securities to approximately 200 crypto asset investors in the United States and abroad.  

2. Beaxy Digital and Hamazaspyan undertook their offer and sale of BXY, which 

were offered and sold as investment contracts and therefore as “securities” under the federal 

securities laws, without registering these offers and sales of BXY with the SEC as required by 

the federal securities laws. 

3. In the BXY offering materials, which Hamazaspyan approved, Beaxy Digital 

marketed BXY essentially as a so-called “exchange token” (a crypto asset associated with a 

crypto asset trading platform). Here, Beaxy Digital described prospective BXY purchasers as 

“investors” and said that Beaxy Digital would use the proceeds from the offering to develop, 

market, and operate a crypto asset trading platform (hereinafter “the Beaxy Platform”), and tied 

the value of BXY to the success of the Beaxy Platform and the efforts of Beaxy Digital’s 

management. 

4. Hamazaspyan’s representations about the use of proceeds from this unregistered 

offering of BXY were false. In reality, during the BXY offering and for three months thereafter, 

Hamazaspyan misappropriated at least $900,000 of the investment proceeds for his personal use, 

including gambling. 

5. In October 2019, Murphy and Abbott, who were high-level Beaxy Digital 

personnel at the time but did not control the Beaxy Platform, discovered Hamazaspyan’s 

                                                           
1 As used in this complaint, “crypto asset security” refers to an asset that is issued and/or transferred using 
distributed ledger or blockchain technology – including, but not limited to, so-called “digital assets,” “virtual 
currencies,” “coins,” and “tokens” – and that meets the definition of “security” under the federal securities laws.  
“Security” includes any “investment contract,” “security-based swap,” or “receipt for” a security. 

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3 

misappropriation and convinced him to separate from all Beaxy Platform-affiliated entities. 

6. As part of Hamazaspyan’s separation, Murphy and Abbot assumed control of the 

Beaxy Platform and began operating it through Windy, an entity they acquired as part of the 

same series of transactions.   

7. From October 2019 to the present, Murphy and Abbott acted as control persons of 

Windy and therefore controlled the Beaxy Platform. 

8. From October 2019 to the present, Windy provided and maintained the Beaxy 

Platform, which was open to the general public for use 24 hours a day, seven days a week, at the 

internet address beaxy.com. The Beaxy Platform brought together the orders of multiple buyers 

and sellers in crypto asset securities, using established, non-discretionary methods.  Despite 

providing the Beaxy Platform as a market place for securities, Windy did not register as a 

national securities exchange. 

9. Further, from October 2019 to the present, Windy was not registered with the 

SEC as a broker, even though Windy, among other things, was in the regular business of 

effecting transactions in crypto asset securities at key points in the distribution chain for these 

securities, by, among other things, actively soliciting and recruiting investors in these securities, 

regularly advertising the Beaxy Platform, and receiving transaction-based compensation with 

respect to these securities.  

10. Additionally, from October 2019 to the present, Windy was not registered with 

the SEC as a clearing agency, even though Windy, among other things, acted as a custodian of 

securities by holding crypto asset securities as custodial assets for the Beaxy Platform’s 

customers’ benefit in Windy-controlled wallets, where the assets were not segregated by 

customer and only transferred to customers’ control following their instructions to withdraw the 

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4 

assets from the Beaxy Platform.   

11. In February and September 2020, Murphy and Abbott oversaw the review, 

removal from trading, and resumption of trading of various crypto assets that were offered and 

sold as investment contracts and therefore as “securities” under the federal securities laws.  

12. During this process, Murphy and Abbott failed to exclude or prevent trading of 

crypto asset securities on the Beaxy Platform despite knowing facts demonstrating that the 

crypto assets were in fact offered and sold as securities.  

13. From approximately 2019 to the present, Braverock Investments, Future Digital, 

Windy Financial, and Future Financial (collectively, the “Braverock Defendants”) provided 

market making services to Windy and to Dragonchain, Inc. (“Dragonchain”), which was the 

issuer of the crypto asset DRGN that was offered and sold as a security, to provide liquidity in 

BXY and DRGN trading on the Beaxy Platform by offering to buy and sell these securities at 

various prices and quantities, and using trading algorithms to execute market making trading 

strategies, among other things, in exchange for flat monthly fees from Windy and Dragonchain. 

The Braverock Defendants also engaged in the regular business of buying and selling BXY and 

DRGN on various crypto asset trading platforms. 

14. During all relevant times, Peterson owned and controlled the Braverock 

Defendants, including their trading accounts. Neither Peterson nor the Braverock Defendants 

were registered with the SEC as dealers in violation of the federal securities laws. 

15. By engaging in the misconduct described here, Defendants violated numerous 

provisions of the federal securities laws, including the antifraud, securities offering registration, 

and exchange, broker-dealer, and clearing agency registration provisions as detailed below. 

16. The SEC seeks to enjoin each of the Defendants in this action from future 

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5 

violations of the federal securities laws, and also seeks disgorgement of their ill-gotten gains, 

along with prejudgment interest and civil penalties. The SEC also requests that the Court enter 

(a) against Hamazaspyan an officer and director bar pursuant to Section 20(e) of the Securities 

Act of 1933 (“Securities Act”), 15 U.S.C. § 77t(e), and Section 21(d)(2) of the Securities 

Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78u(d)(2), and (b) an injunction 

prohibiting Beaxy Digital and Hamazaspyan from participating, directly or indirectly, in any 

securities offering; provided, however, that such injunction shall not prevent Hamazaspyan from 

purchasing or selling securities other than BXY for his own personal account. 

JURISDICTION AND VENUE 

17. The Court has jurisdiction over this action pursuant to Section 20(b) and (d) of the 

Securities Act, 15 U.S.C. § 77t(b) and (d), and Sections 21(d), 21(e), and 27 of the Exchange 

Act, 15 U.S.C. §§ 78u(d), 78u(e), and 78aa. Defendants, directly and indirectly, have made use 

of the means or instruments of transportation or communication in, and the means and 

instruments of interstate commerce or of the mails, in connection with the transactions, acts, 

practices, and courses of business alleged herein.   

18. Venue is proper in this district pursuant to Section 22(a) of the Securities Act, 15 

U.S.C. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. § 78aa, because Defendants 

reside or transacted business in this district, and some of the transactions, acts, practices, and 

courses of business constituting the securities violations alleged herein occurred within this 

district.  

DEFENDANTS 

19.  Beaxy Digital, Ltd. (“Beaxy Digital”) is a Saint Kitts and Nevis corporation with 

its former principal place of business in Chicago, Illinois. Beaxy Digital has not registered with 

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6 

the Commission in any capacity, nor has it ever registered any offering of securities under the 

Securities Act. 

20. Artak Hamazaspyan (“Hamazaspyan”), age 34, formerly of Chicago, Illinois, 

was the founder, President, and a shareholder of Beaxy Digital and was the sole owner and 

principal of Windy Blockchain Solutions LLC. A citizen of the Republic of Armenia, 

Hamazaspyan relocated to Armenia in November 2020. Hamazaspyan has not registered with the 

Commission in any capacity, nor has he ever registered any offering of securities under the 

Securities Act. 

21. Windy Inc. (“Windy”) is a Delaware corporation with its principal place of 

business in Chicago, Illinois. Windy maintained and provided the Beaxy Platform to the public 

from October 2019 to the present. Windy has not registered with the Commission in any 

capacity, nor has it ever registered the Beaxy Platform with the Commission in any capacity. 

22. Nicholas Murphy (“Murphy”), age 30, is a resident of Chicago, Illinois.  

Together with Randolph Bay Abbott, he is co-owner and co-president of Windy. Murphy has not 

registered with the Commission in any capacity, nor has he ever registered the Beaxy Platform 

with the Commission in any capacity. 

23. Randolph Bay Abbott (“Abbott”), age 30, is a resident of Chicago, Illinois.  

Together with Murphy, he is co-owner and co-president of Windy. Abbott has not registered 

with the Commission in any capacity, nor has he ever registered the Beaxy Platform with the 

Commission in any capacity. 

24. Brian Peterson (“Peterson”), age 51, is a resident of Riverside, Illinois. He owns 

and controls Braverock Investments, Future Digital Markets, Windy Financial, and Future 

Financial. Peterson has not registered with the Commission in any capacity, nor has he ever 

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7 

registered any of the Braverock Defendants with the Commission in any capacity. 

25. Braverock Investments, LLC (“Braverock Investments”) is an Illinois company 

with its principal place of business in Chicago, Illinois that provided market making services in 

crypto asset securities. Braverock Investments has not registered with the Commission in any 

capacity. 

26. Future Digital Markets, Inc. (“Future Digital”) is an Armenian corporation with 

its principal place of business in Chicago, Illinois that provided market making services in crypto 

asset securities. Future Digital has not registered with the Commission in any capacity. 

27. Windy Financial LLC (“Windy Financial”) is a Delaware company with its 

principal place of business in Chicago, Illinois that provided market making services in crypto 

asset securities. Windy Financial has not registered with the Commission in any capacity. 

28. Future Financial LLC (“Future Financial”) is a Delaware company with its 

principal place of business in Chicago, Illinois that provided market making services in crypto 

asset securities. Future Financial has not registered with the Commission in any capacity. 

OTHER RELEVANT INDIVIDUALS AND ENTITIES 

29. Windy Blockchain Solutions LLC (“Windy Blockchain”) is an Illinois company 

with its principal place of business in Chicago, Illinois, which was involuntarily dissolved by the 

State of Illinois on September 29, 2020. 

30. Dragonchain is a Washington corporation with its principal place of business in 

Bellevue, Washington. It markets and purports to develop Dragonchain technology and 

“ecosystem.” On August 16, 2022, the SEC filed a civil action against Dragonchain and others 

alleging that they conducted an unregistered offering of the crypto asset security DRGN. SEC v. 

Dragonchain, Inc., 2:22-cv-01145 (W.D. Wash.). 

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8 

31. Chicago Crypto Capital LLC (“CCC”) is an Illinois limited liability company 

with its headquarters in Chicago, Illinois. CCC sells crypto assets and markets other blockchain-

related investments. On September 14, 2022, the SEC filed a civil action against CCC and others 

alleging that they conducted an unregistered securities offering of BXY, acted as unregistered 

brokers, and engaged in securities fraud. SEC v. Chicago Crypto Capital LLC, 1:22-cv-04975 

(N.D. Ill.).  

BACKGROUND ON CRYPTO ASSETS AND  
CRYPTO ASSET TRADING PLATFORMS 

 
32. The term “crypto asset” refers to an asset issued and/or transferred using 

distributed ledger or blockchain technology, including assets sometimes referred to as “digital 

assets,” “cryptocurrencies,” digital “coins,” and digital “tokens.” 

33. A blockchain or distributed ledger is a database spread across a network of 

computers that records all transactions in theoretically unchangeable, digitally recorded data 

packages. The system relies on cryptographic techniques for secure recording of transactions.  

34. Crypto assets are typically represented in one or more blockchains, meaning that 

records of their ownership and transfer are stored on each particular digital ledger or blockchain. 

35. In regulatory compliant securities markets, participants register under the 

Exchange Act depending upon which of the various activities they undertake – including, for 

example, registration as a national securities exchange, as a broker-dealer, or as a clearing 

agency for securities. These functions are delineated to, among other things, provide 

Commission oversight and protect investors and their assets from conflicts and potential abuses 

that may arise when investors buy and sell securities.  

36. Generally speaking, crypto asset platforms offer a variety of services relating to 

crypto assets, often including brokerage, trading, settlement, and custody. Crypto asset trading 

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platforms typically allow crypto assets to be bought and sold with fiat currency (legal tender 

issued by a governmental authority) or other crypto assets. Platforms might settle transactions 

“on-chain” (i.e., by making transfers of assets from one blockchain address to another) or “off-

chain” (i.e., solely by making allocations between investors’ accounts held by the platform). 

37. Crypto asset trading platforms like the Beaxy Platform may offer and sell crypto 

assets they call “exchange tokens,” a crypto asset typically marketed as an investment in the 

platform’s promoters’ efforts to make the platform a success, including as an opportunity to trade 

more profitably on the platform. 

38. These platforms may provide marketplaces and facilities that bring together 

purchasers and sellers of securities like registered national securities exchanges do, and similarly 

display orders, establish rules for order interaction, and provide methods to match orders of 

buyers and sellers. 

39. As currently operating, crypto asset trading platforms, including the Beaxy 

Platform, frequently perform multiple functions that require separate registration and, in 

compliant securities markets, are handled by separate registered entities – exchanges, broker-

dealers, and clearing agencies.   

40. For example, as further set forth below, the Beaxy Platform sought to generate 

customers’ awareness of and interest in crypto assets, solicited customers for the purpose of 

effecting transactions in securities on their behalf, and accepted orders in securities from those 

customers. The Beaxy Platform also established and maintained functionality to match the orders 

in securities of multiple buyers and sellers, resulting in purchases and sales. Finally, the Beaxy 

Platform maintained a central securities depository for the settlement of securities transactions 

and acted as an intermediary in making payments or deliveries or both in connection with 

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transactions in securities effected on the Beaxy Platform. 

41. Moreover, platforms like the Beaxy Platform require users to deposit with the 

platform all of the crypto asset securities that they traded there, resulting in the platform 

possessing, and even becoming the legal owner of such assets and thus a central securities 

depository. This type of arrangement means that an unregistered crypto asset platform like the 

Beaxy Platform could use assets in their possession and control for its own purposes, thereby 

exposing investors to significant and at times undisclosed risk of loss of their assets. Investors 

who invest through such a platform may face a risk that, if the platform were to enter 

bankruptcy, they might not be able to withdraw their assets and would become unsecured 

creditors of the bankruptcy estate. 

42. On national securities exchanges, by contrast, investors interact through broker-

dealer intermediaries that effect transactions in securities on behalf of investors. The exchange 

does not take possession or control of the underlying assets being traded. 

43. The Beaxy Platform also performed a settlement function when it updated its 

internal ledger of each investor’s positions following execution of a trade. In the regulated 

securities markets, this settlement typically is carried out by clearing agencies. 

44. The Beaxy Platform, as further set forth below, also performed functions 

traditionally performed by broker-dealers in traditional securities markets, without registering as 

a broker-dealer and thereby subjecting itself to the legal obligations and restrictions on activities 

that accompany status as a broker or dealer.  

45. The Beaxy Platform also had the ability to trade crypto asset securities against its 

own customers, which gives it the means and the motive to put itself on the winning side of each 

trade, without regard to obligations that apply to registered broker-dealers.  

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46. On July 25, 2017, the SEC issued the Report of Investigation Pursuant to Section 

21(a) of the Securities Exchange Act of 1934: The DAO (the “DAO Report”), advising “those 

who would use . . . distributed ledger or blockchain-enabled means for capital raising[] to take 

appropriate steps to ensure compliance with the U.S. federal securities laws,” and finding that the 

offering of digital assets at issue in the DAO Report were investment contracts and, therefore, 

securities. 

47. The DAO Report also advised that “any entity or person engaging in the activities 

of an exchange must register as a national securities exchange or operate pursuant to an 

exemption from such registration,” and “stress[ed] the obligation to comply with the registration 

provisions of the federal securities laws with respect to products and platforms involving 

emerging technologies and new investor interfaces.” The DAO Report also found that the 

platforms at issue there “provided users with an electronic system that matched orders from 

multiple parties to buy and sell [the crypto asset securities at issue] for execution based on non-

discretionary methods” and therefore “appear to have satisfied the criteria” for being an 

exchange under the Exchange Act. 

FACT ALLEGATIONS 

A. Beaxy Digital Issued Beaxy Crypto Assets. 

48. In or around 2018, Beaxy Digital sought to develop the Beaxy Platform, a web-

based system for carrying out multiple functions with respect to crypto assets, which it planned 

to launch in 2019.   

49. At that time, Hamazaspyan controlled the majority of Beaxy Digital’s outstanding 

shares and was the final decision-maker with regard to Beaxy Digital and the Beaxy Platform.   

50. At that time, Hamazaspyan also controlled Windy Blockchain, a company whose 

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bank account he used to receive deposits of Beaxy Digital’s investment proceeds and pay for 

Beaxy Digital’s business expenditures.   

51. To fund the development of the Beaxy Platform and related applications, Beaxy 

Digital began selling BXY, offered and sold as security, in approximately 2018. BXY purchasers 

invested in a common enterprise with an expectation of profits derived from the efforts of others. 

52. Specifically, from January 2018 through June 2019, Beaxy Digital conducted a 

so-called “private sale” of yet-to-be created BXY in the form of so-called “Simple Agreements 

for Future Tokens,” which were executed by Hamazaspyan in his capacity as the President of 

Beaxy Digital.   

53. The offering raised approximately $8 million worth of bitcoin, ether, and fiat 

currency from approximately 200 investors, including investors in the United States.   

54. During this “private sale,” Beaxy Digital offered BXY at various discounts, which 

fluctuated over time and based on the amount purchased. 

B. Beaxy Digital and Hamazaspyan Marketed BXY by Promoting its Profit Potential 
as Tied to the Success of the Beaxy Platform. 

55. Beaxy Digital and Hamazaspyan identified “private sale” purchasers through 

Hamazaspyan’s business relationships as well as through their own public marketing and 

marketing by crypto asset influencers retained by Beaxy Digital and Hamazaspyan. They 

targeted their marketing efforts to persons who would seek to derive profit from the increase in 

BXY’s trading value.   

56. Beaxy Digital also engaged at least one third-party reseller, CCC, to solicit 

investors.   

57. Beaxy Digital’s offering materials to the “private sale” purchasers (“Offering 

Materials”), which Hamazaspyan approved and directed to be distributed, stated that crypto 

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assets issued by “exchanges” had been the most profitable initial coin offerings in 2018 and that 

“exchanges are where the profits are.”  

58. With statements such as these, Beaxy Digital and Hamazaspyan sought to entice 

“private sale” purchasers to buy BXY by pointing out that they will be able to profit from the 

future increase in the price of BXY. 

59. The Offering Materials also stated that BXY was “speculative,” and made other 

representations that the value of BXY was tied to Beaxy Digital’s ability to operate a profitable 

crypto asset platform.   

60. The Offering Materials stated that the BXY sales proceeds would be pooled and 

used to develop the Beaxy Platform. For example, the Offering Materials specified that the 

offering proceeds would be used to develop the Beaxy Platform infrastructure, operations, 

marketing, customer support, and legal and regulatory compliance. The Offering Materials also 

stated that Beaxy Digital would reserve 40% of all BXY to be able to “operate for up to 2 years 

without making a profit.” 

61. By publicly stating that Beaxy Digital would reserve nearly half of all BXY, 

Beaxy Digital signaled to reasonable investors that Beaxy Digital had a strong financial incentive 

to undertake efforts to increase BXY’s value.  

62. Neither Beaxy Digital nor Hamazaspyan set up separate or segregated accounts to 

manage BXY investors’ assets. To the contrary, as noted, the Offering Materials stated that 

Beaxy Digital would pool proceeds and use them fungibly to develop the Beaxy Platform. 

63. In its publicly-available “Whitepaper,” a document commonly used by crypto 

asset projects to describe its technical and operational plans, Beaxy Digital touted the credentials 

and experience of its team. Specifically, the Beaxy Whitepaper described Hamazaspyan as “the 

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‘founding father’ of Beaxy” who “has worked 10 years in software development” and had “prior 

experience in leading businesses.”  

64. The Beaxy Whitepaper also described several Beaxy Digital software developers 

and engineers as team members with over 10 years of development experience each and 

highlighted their software and computer engineering degrees.  

65. The Beaxy Whitepaper also highlighted the Beaxy Digital business personnel’s 

training and “expert[ise]” in “helping businesses grow quickly.” 

66. After launching the Beaxy Platform in June 2019, Beaxy Digital and 

Hamazaspyan sought to attract “traditional traders, retail investors and institutional investors” to 

trade crypto assets on the Beaxy Platform. They, therefore, sought to attract the types of 

purchasers who buy crypto assets for investment purposes.   

67. In addition to reviewing and approving these materials, Hamazaspyan personally 

participated in solicitation meetings with investors.  

68. As stated in Beaxy Digital’s marketing materials, users could opt to pay their 

Beaxy Platform trading fees in BXY at a discounted rate or to use other crypto assets.   

C. Beaxy Digital and Hamazaspyan Sold BXY to Unaccredited Crypto Investors. 

69. In its Offering Materials, Beaxy Digital stated that the “private sale” of BXY was 

limited to non-U.S. persons or accredited U.S. investors.   

70. In the offering, however, Beaxy Digital and Hamazaspyan directed selling efforts 

into the U.S. and sold BXY to U.S. persons. U.S. investors purchased BXY during the sale and at 

least some of the purchasers signed forms self-certifying that they were either “accredited” or 

“foreign investors.”   

71. Beaxy Digital did not have any processes or controls in place – and took no steps 

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– to verify the investors’ accreditation status.   

72. In fact, Beaxy Digital explicitly instructed a CCC salesperson to seek investments 

from non-accredited U.S. investors, which the salesperson did by posting solicitation messages 

on social media.   

D. Beaxy Digital and Hamazaspyan Placed No Restrictions on Resale of BXY. 

73. Beaxy Digital did not take any steps to limit resales of BXY by the “private sale” 

purchasers, and did not require investors to hold their BXY for any period of time after purchase.   

74. Beaxy Digital and Hamazaspyan also facilitated trading in BXY by making them 

available to trade on the Beaxy Platform.   

75. BXY sold in the original offering and on the Beaxy Platform were all fungible 

with each other, and each investor’s pro rata ownership of BXY rose or decreased in value 

together with all other investors’ ownership of BXY. 

76. Moreover, immediately before the public launch of the Beaxy Platform, 

Hamazaspyan instructed the development team to ensure that the platform could handle a large 

volume of transactions because: (1) he expected purchasers to be selling the discounted BXY 

they obtained in the “private sale”; and (2) the Beaxy Platform was the only place where 

purchasers could trade BXY.   

77. Beaxy Digital also hired market makers to provide liquidity for BXY trading and 

provided the market makers with a pool of BXY to facilitate liquidity.   

78. Beaxy Digital allowed all private sale purchasers to sell their BXY on the Beaxy 

Platform without any restrictions as to the accredited or foreign status of the purchasers.   

E. Hamazaspyan Misappropriated Offering Proceeds. 

79. As noted, in the BXY Offering Materials, which Hamazaspyan approved, Beaxy 

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Digital informed its investors that it would use the proceeds to develop, market, and operate the 

Beaxy Platform and explicitly tied the value of BXY to the success of the Beaxy Platform and 

the efforts of Beaxy Digital’s management. 

80. Hamazaspyan’s representations about the use of proceeds were false. In reality, 

between March and August 2019, Hamazaspyan made ten cash withdrawals totaling $900,000 

from Windy Blockchain’s bank account, which had been funded by proceeds from the 2018 and 

2019 private sales of BXY to investors.   

81. Hamazaspyan used these funds for his personal use, including gambling. By 

misappropriating offering proceeds, Hamazaspyan acted knowingly or recklessly and with the 

intent to defraud BXY investors. 

F. Murphy and Abbott Took Control of the Beaxy Platform. 

82. When Hamazaspyan’s misappropriation was discovered in 2019, Murphy and 

Abbott, managers at Beaxy Digital at the time, convinced Hamazaspyan to separate from all 

Beaxy-affiliated entities, relinquish control over all of the Beaxy Platform’s business, including 

business bank and crypto asset accounts and wallets, and pay back $420,000 (out of the $900,000 

that Hamazaspyan misappropriated) to Windy and Beaxy Digital, thereby leaving $480,000 of 

the misappropriated funds outstanding.   

83. As part of Hamazaspyan’s separation, Murphy and Abbott received full control 

over Windy and began operating the Beaxy Platform through Windy.   

84. As a result, from October 2019 to the present, Murphy and Abbott acted as 

control persons of Windy and the Beaxy Platform. 

85. In October and November 2019, Murphy and Abbott used the funds received 

from Hamazaspyan, as well as a loan from a third party, to continue operating the Beaxy 

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Platform. 

G. Windy Maintained and Provided the Beaxy Platform as an Unregistered Exchange. 

86. From October 2019 to the present, Windy operated the Beaxy Platform from the 

internet address beaxy.com 24 hours per day, seven days per week, and had support staff 

available on social media platforms during those hours. 

87. At its height, the Beaxy Platform had a total of approximately 2,300 users, 

approximately 855 of whom were located in the United States, and over the course of its history 

has executed over 1 million transactions. 

88. The Beaxy Platform website and other marketing materials stated that the Beaxy 

Platform was an “exchange” that sought to attract “traditional traders, retail investors and 

institutional investors” as users.   

89. Through the Beaxy Platform, Windy brought together the orders of multiple 

buyers and sellers for crypto assets securities, including BXY.  

90. Users were allowed to enter on the Beaxy Platform limit orders, market orders, 

and stop-market orders, with time in-force instructions or other parameters such as fill-or-kill, 

immediate-or-cancel, good-till-cancelled, good-till-date, and good-till-crossing.  

91. The Beaxy Platform allowed users to purchase crypto asset securities in exchange 

for both fiat funds and other crypto assets.  

92. The Beaxy Platform displayed to all of its users orders of crypto asset securities 

that rested in the Beaxy Platform order book. Order information displayed to users from the 

order book included the crypto asset security, side, size, and price.  

93. The Beaxy Platform included a trading facility through its software-based 

automated matching engine. The matching engine was programmed with rules that determined 

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how orders would interact and allowed users entering such orders to agree to the terms of a trade.    

For example, an order entered into the matching engine would match with an order resting on the 

order book based on a price-time priority basis. The Beaxy Platform also had publicly-available 

“Trading Rules” that governed order size, execution, and pricing.   

94. Accordingly, Windy used established, non-discretionary methods through the 

provision of the Beaxy Platform order matching trading facility.   

95. Before a user could trade on the Beaxy Platform, the Beaxy Platform required the 

user to deposit with it any fiat funds or crypto assets that the user wished to trade.  

96. The Beaxy Platform kept all fiat funds in bank accounts that Windy controlled, 

and kept crypto assets being transacted in wallets Windy controlled, rather than in the users’ own 

wallets.  

97. When a transaction took place, the Beaxy Platform carried out “off-chain 

settlement.” In other words, it adjusted the user balances on its internal ledger and only 

transferred crypto assets through a blockchain transaction when a user requested a withdrawal.   

98. On beaxy.com, Windy described how transactions and user balances worked as 

follows: (1) the Beaxy Platform held customers’ assets (both funds and crypto asset securities) in 

bank accounts and digital wallets Windy controlled; (2) it held such assets as “custodial assets … 

for [its customers’] benefit”; (3) the assets were “not segregated” by customer, but tracked on 

“separate ledgers”; and (4) an algorithm would “settle filled orders immediately, by modifying 

the appropriate [crypto asset] balances in users’ accounts accordingly.”   

99. Accordingly, Windy held custody of all assets and fiat funds on behalf of its users 

until the user requested withdrawals of such assets and funds. 

100. Through beaxy.com and social media channels, Windy, Murphy, and Abbott 

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solicited investors to purchase crypto asset securities.   

101. The Beaxy Platform charged a fee on each transaction it executed, and these fees 

flowed directly to Windy, constituting Windy’s revenue. 

102. To date, Windy has received $10,779 that the Beaxy Platform collected as 

transaction fees in connection with transactions involving crypto asset securities.  

103. Despite providing and maintaining the Beaxy Platform as a marketplace for 

crypto asset securities, Windy did not register as a national securities exchange. 

H. Windy Reviewed Crypto Assets Offered and Sold on the Beaxy Platform. 

104. In February and September 2020, Murphy and Abbott oversaw and managed a 

review of certain crypto assets offered by the Beaxy Platform to determine whether to allow 

them to continue trading.   

105. During this process, Windy removed several crypto assets, primarily due to the 

low volume of trading in these crypto assets.   

106. Windy asked the issuers of these crypto assets to reapply for the assets to be made 

available on the Beaxy Platform by responding to a questionnaire and retaining a market maker 

that would provide liquidity for their crypto asset on the Beaxy Platform.   

107. As a result of this process, in 2020, Windy removed certain crypto assets from the 

Beaxy Platform, including DRGN.   

108. Dragonchain reapplied to Windy to add DRGN back on the Beaxy Platform. 

Attached to Dragonchain’s application was a memorandum that concluded that DRGN was not a 

security as long as Dragonchain would “avoid soliciting and participating in the creation of a 

secondary marketplace for [DRGN] so as to decrease the likelihood that prospective purchasers 

would be found to have a reasonable expectation for profits using such a marketplace,” and as 

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long as Dragonchain’s Offering Materials would target purchasers with technical ability to use 

DRGN for its “utility.”   

109. Murphy and Abbott generally participated in the discussions with Dragonchain 

about its application, were copied on the email attaching this reapplication memorandum, and 

Abbott signed the agreement on behalf of Windy. 

110. As a result of this process, in the summer of 2020, Windy added back DRGN to 

the Beaxy Platform. 

111. Neither Windy, Murphy, nor Abbott took any steps to confirm whether 

Dragonchain in fact limited its offerings of DRGN to users with any specific technical ability, as 

the memorandum specified.   

112. Throughout this process, Windy, Murphy, and Abbott never undertook any 

analysis or made any explicit decision as to whether to remove BXY from the Beaxy Platform.   

113. As a result, BXY continued to trade on the Beaxy Platform after Murphy and 

Abbott took over its operation.   

114. As of 2023, the crypto asset securities BXY and DRGN, among others, were still 

available for trading on the Beaxy Platform. 

I. Windy Acted as an Unregistered Broker. 

115. Windy was not registered with the SEC as a broker-dealer at any time. 

116. Windy was engaged in a regular business of effecting transactions in crypto asset 

securities for the account of others, participating in over a million transactions on behalf of at 

least 2,300 customers that occurred “at key points in the chain of distribution.”   

117. Namely, Windy actively solicited and recruited investors by regularly advertising 

the features of the Beaxy Platform on beaxy.com and social media channels.   

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118. Moreover, as described above, Windy helped to facilitate those transactions by 

assisting customers in opening accounts and regularly handled customer funds and securities, as 

described above.   

119. For these services, the Beaxy Platform charged a fee on each transaction it 

executed and these fees flowed directly to Windy.   

120. By engaging in these activities, Windy was acting as an unregistered broker. 

J. Windy Acted as an Unregistered Clearing Agency. 

121. Windy was not registered with the SEC as a clearing agency at any time. 

122. According to the Beaxy Platform’s terms and conditions made available on its 

website and provided to users, Windy held all crypto asset securities as “custodial assets for [its 

customers’] benefit” in Windy-controlled wallets, where they were “not segregated” by 

customer.   

123. When a transaction was executed, Windy settled the transaction using 

bookkeeping entries that simply adjusted its “separate ledgers” for each crypto asset and 

modified “balances in users’ accounts,” rather than moving the assets on the blockchain.   

124. The terms and conditions also stated that Windy allowed users to create fiat 

currency accounts for funding purchases of crypto asset securities and digital asset accounts for 

holding such crypto asset securities. As noted above, the Beaxy Platform settled transactions off-

chain.  

125. By engaging in these activities, Windy acted as an unregistered clearing agency. 

K. Peterson and the Braverock Defendants Acted as Unregistered Dealers.  

126. Neither Peterson nor the Braverock Defendants were registered as dealers with 

the SEC. 

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127. Peterson, through the Braverock Defendants, engaged in a regular business of 

buying and selling securities for its own account. 

128. In December 2019, the Braverock Defendants, which are owned and controlled by 

Peterson, executed a market making agreement with Windy.   

129. The agreement stated that Windy sought “to have more influence over the shape 

of [BXY’s] liquidity” and was retaining Braverock Defendants “to trade on agency basis on 

[Windy’s] behalf.”   

130. According to the agreement, Braverock Defendants would utilize Windy’s staff, 

servers, email accounts, and capital and provide Braverock Defendants’ intellectual property in 

the form of market making algorithmic software and expertise in order to make markets for 

BXY.   

131. Windy also provided Braverock Defendants with the crypto assets with which 

Braverock Defendants could provide liquidity for BXY.   

132. In exchange for its market making services, Windy agreed to pay Braverock 

Defendants a flat monthly fee of $10,000, but these payments would be deferred until Windy 

became “cash flow positive,” which has yet to happen.   

133. Although the crypto assets with which Braverock Defendants made markets for 

BXY were owned by Windy, Braverock Defendants used accounts in the name of Braverock 

Defendants for all the trades they executed on the Beaxy Platform.   

134. Similarly, in May 2020, Dragonchain executed a market making agreement with 

one of the Braverock Defendants, Windy Financial.   

135. Dragonchain executed the agreement because Windy requested Dragonchain to 

retain a market maker in order to increase the volume of transactions in DRGN on the Beaxy 

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Platform. Windy recommended that Dragonchain retain Windy Financial as its market maker.   

136. The agreement stated that Dragonchain sought “market making services … to 

ensure predictability to the liquidity” in DRGN trading. Pursuant to the agreement, Dragonchain 

paid Windy Financial a flat monthly fee of $2,000 and Dragonchain provided all assets with 

which Windy Financial would trade.   

137. Windy Financial made markets for DRGN on the Beaxy Platform by trading out 

of accounts in its own name.   

138. To date, Windy Financial received approximately $52,000 in monthly fees from 

Dragonchain. 

139. For both BXY and DRGN, Peterson and the Braverock Defendants set up 

algorithms that created and controlled trading accounts on multiple crypto asset trading 

platforms, including the Beaxy Platform. The algorithm was designed to enter orders to buy or 

sell BXY and DRGN at a variety of prices and volumes, and supported liquidity of the two 

crypto assets because it allowed other Beaxy Platform users interested in buying or selling these 

assets to find a counter-party even when other users were less active in these assets.   

140. The orders entered by the market maker were not identified as involving a market 

maker in the order books. Therefore, a Beaxy Platform user would not know whether, in a 

particular transaction, they were transacting with a market maker or another user. 

141. As a result of this conduct, Peterson and the Braverock Defendants acted as 

unregistered dealers. 

COUNT I 
 

Violations of Section 5(a) and (c) of the Securities Act 
(against Defendants Beaxy Digital and Hamazaspyan) 

 
142. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

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141, as though fully set forth therein. 

143. By reason of the acts and conduct described in this Complaint, Defendants Beaxy 

Digital and Hamazaspyan, directly or indirectly, singly and in concert with others, have: (a) 

made use of the means and instruments of transportation or communication in interstate 

commerce and of the mails to sell, through the use or medium of any prospectus or otherwise, 

securities as to which no registration statement was in effect; and/or (b) for the purpose of sale or 

delivery after sale, carried and caused to be carried through the mails and interstate commerce, 

by the means and instruments of transportation, securities as to which no registration statement 

was in effect; and/or (c) made use of the means and instruments of transportation or 

communication in interstate commerce and of the mails to offer to sell, through the use or 

medium of any prospectus or otherwise, securities as to which no registration statement had been 

filed. 

144. By reason of the foregoing, Defendants Beaxy Digital and Hamazaspyan, directly 

or indirectly, violated, are violating, and, unless enjoined, will continue to violate Section 5(a) 

and (c) of the Securities Act, 15 U.S.C. § 77e(a) and (c). 

COUNT II 
 

Violations of Exchange Act Section 10(b) and Rule 10b-5 
(against Defendant Hamazaspyan) 

 
145. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

141, as though fully set forth therein. 

146. By reason of the acts and conduct described in this Complaint, Defendant 

Hamazaspyan, directly or indirectly, in connection with the purchase or sale of securities, by the 

use of means or instrumentalities of interstate commerce or of the mails: (a) used and employed 

devices, schemes, or artifices to defraud; (b) made untrue statements of a material fact or omitted 

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to state material facts necessary in order to make the statements made, in the light of the 

circumstances under which they were made, not misleading; and (c) engaged in acts, practices, 

or courses of business which operated or would operate as a fraud and deceit upon any person. 

147. Defendant Hamazaspyan intentionally or recklessly engaged in the fraudulent 

conduct described above.  

148. By reason of the foregoing, Defendant Hamazaspyan, directly or indirectly, 

violated, is violating, and, unless enjoined, will continue to violate Section 10(b) of the Exchange 

Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder. 

COUNT III 
 

Violations of Securities Act Section 17(a) 
(against Defendant Hamazaspyan) 

149. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

141, as though fully set forth therein. 

150. By engaging in the acts and conduct described in this Complaint, Defendant 

Hamazaspyan, directly or indirectly, in the offer or sale of securities, by use of the means or 

instruments of transportation or communication in interstate commerce or by use of the mails: (a) 

employed devices, schemes, and artifices to defraud; (b) obtained money or property by means 

of untrue statements of material facts or omissions to state material facts necessary in order to 

make the statements made, in light of the circumstances under which they were made, not 

misleading; and (c) engaged in transactions, practices, and courses of business which operated or 

would operate as a fraud or deceit upon purchasers or prospective purchasers. 

151. Defendant Hamazaspyan intentionally, recklessly, or negligently engaged in the 

fraudulent conduct described above. 

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152. By reason of the foregoing, Defendant Hamazaspyan, directly or indirectly, 

violated, is violating, and, unless enjoined, will continue to violate Section 17(a) of the Securities 

Act, 15 U.S.C. § 77q(a). 

COUNT IV 
 

Violations of Exchange Act Section 5 
(against Defendant Windy) 

 
153. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

141, as though fully set forth therein. 

154. By engaging in the acts and conduct described in this Complaint, Defendant 

Windy, an exchange, directly or indirectly, made use of the mails and the means and 

instrumentalities of interstate commerce for the purpose of using any facility of an exchange 

within or subject to the jurisdiction of the United States to effect and report transactions in a 

security without being registered as national securities exchange under Exchange Act Section 6, 

15 U.S.C. § 78f. 

155. By reason of the foregoing, Defendant Windy, directly or indirectly, violated, is 

violating, and, unless enjoined, will continue to violate Exchange Act Section 5, 15 U.S.C. § 78e. 

COUNT V 
 

Violations of Exchange Act Section 15(a) 
(against Defendant Windy) 

156. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

141, as though fully set forth therein. 

157. By engaging in the acts and conduct described in this Complaint, Defendant 

Windy, a person other than a natural person under the Exchange Act, is a broker by and made 

use of the mails and the means and instrumentalities of interstate commerce to effect any 

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transactions in, or to induce or attempt to induce the purchase or sale of, any security, without 

registering as a broker-dealer. 

158. By reason of the foregoing, Defendant Windy, directly or indirectly, violated, is 

violating, and, unless enjoined, will continue to violate Exchange Act Section 15(a), 15 U.S.C. 

§ 78o(a). 

COUNT VI 
 

Violations of Exchange Act Section 17A 
(against Defendant Windy) 

 
159. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

141, as though fully set forth therein. 

160. By engaging in the acts and conduct described in this Complaint, Defendant 

Windy, directly or indirectly, made use of the mails and the means and instrumentalities of 

interstate commerce to perform the functions of a clearing agency with respect to securities, 

without registering in accordance to Section 17A(b) of the Exchange Act. 

161. By reason of the conduct described above, Defendant Windy, directly or 

indirectly, violated, is violating, and, unless enjoined, will continue to violate Exchange Act 

Section 17A(b), 15 U.S.C. § 78q-1. 

COUNT VII 
 

Violations of Exchange Act Sections 5, 15(a), and 17A(b) 
(against Defendants Murphy and Abbott as Control Persons over Defendant Windy) 

 
162. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

141, as though fully set forth therein. 

163. As alleged above, Defendant Windy violated Sections 5, 15(a), and 17A of the 

Exchange Act, 15 U.S.C. §§ 78e, 78o(a), 78q-1.  

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164. At all relevant times, Defendants Murphy and Abbott were control persons of 

Defendant Windy for purposes of Section 20(a) of the Exchange Act, 15 U.S.C. § 78t(a). 

165. At all relevant times, Defendants Murphy and Abbott exercised power and control 

over Defendant Windy, including by managing and directing that entity, and by directing and 

participating in the acts constituting Defendant Windy’s violations of the securities laws. 

166. By reason of the foregoing, Defendants Murphy and Abbott are liable as control 

persons under Section 20(a) of the Exchange Act, 15 U.S.C. § 78t(a), for Defendant Windy’s 

violations of the Sections 5, 15(a), and 17A of the Exchange Act, 15 U.S.C. §§ 78e, 78o(a), 

78q-1. 

COUNT VIII 
 

Violations of Exchange Act Section 15(a) 
(against Defendants Peterson, Braverock Investments,  
Future Digital, Windy Financial, and Future Financial) 

 
167. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

141, as though fully set forth therein. 

168. By engaging in the acts and conduct described in this Complaint, Defendant 

Peterson, a natural person under the Exchange Act, and Defendants Braverock Investments, 

Future Digital, Windy Financial, and Future Financial, persons other than natural persons under 

the Exchange Act, are dealers and made use of the mails and the means and instrumentalities of 

interstate commerce to effect any transactions in, or to induce or attempt to induce the purchase 

or sale of, any security, without registering as dealers. 

169. By reason of the foregoing, Defendants Peterson, Braverock Investments, Future 

Digital, Windy Financial, and Future Financial, directly or indirectly, violated, are violating, and, 

unless enjoined, will continue to violate Exchange Act Section 15(a), 15 U.S.C. § 78o(a). 

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PRAYER FOR RELIEF 

         WHEREFORE, the SEC respectfully requests that the Court: 

I. 

Find that Defendants committed the violations alleged herein; 

II. 

Issue orders of permanent injunction restraining and enjoining Defendants Beaxy Digital, 

Hamazaspyan, Murphy, Abbott, Windy, Braverock Investments, Future Digital, Windy 

Financial, Future Financial, and Peterson, as well as their offers, agents, servants, employees, 

attorneys, and those persons in active concert or participation with them, from directly or 

indirectly violating the statutes and rules set forth in this Complaint as to each; 

III. 

Issue orders of permanent injunction, pursuant to Section 21(d)(5) of the Exchange Act, 

15 U.S.C. § 78u(d)(5), restraining and enjoining each of Defendants Beaxy Digital and 

Hamazaspyan from participating, directly or indirectly, in any securities offering; provided, 

however, that such injunction shall not prevent Defendant Hamazaspyan from purchasing or 

selling securities other than BXY for his own personal account; 

IV. 

Order Defendants Beaxy Digital, Hamazaspyan, Windy, Braverock Investments, Future 

Digital, Windy Financial, Future Financial, and Peterson to disgorge all ill-gotten gains derived 

from their illegal conduct as set forth in this Complaint, including prejudgment interest thereon 

pursuant to Section 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act, 15 U.S.C. § 78u(d)(3), 

(d)(5), and (d)(7);  

 

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V. 

Order Defendants Beaxy Digital, Hamazaspyan, Murphy, Abbott, Windy, Braverock 

Investments, Future Digital, Windy Financial, Future Financial, and Peterson to pay civil 

penalties pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 

21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3);  

VI. 
 

Pursuant to Section 20(e) of the Securities Act, 15 U.S.C. § 77t(e), and Section 21(d)(2) 

of the Exchange Act, 15 U.S.C. § 78u(d)(2), prohibit Defendant Hamazaspyan from serving as 

an officer or director of any issuer that has a class of securities registered under Section 12 of the 

Exchange Act, 15 U.S.C. § 78l, or that is required to file reports under Section 15(d) of the 

Exchange Act, 15 U.S.C. § 78o(d); 

VII. 

Grant such other and further relief as the Court determines to be necessary and 

appropriate for the protection of investors; and 

VIII. 

Retain jurisdiction over this action to implement and carry out the terms of all orders and 

decrees that may be entered. 

  

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JURY TRIAL DEMAND 
 

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff SEC demands that 

this case be tried to a jury. 

Date:   March 29, 2023   Respectfully submitted, 
 

UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION 

              
      /s/ Alyssa A. Qualls                                               

           Alyssa A. Qualls ([email protected]) 
      Arsen R. Ablaev ([email protected]) 
      Christine B. Jeon ([email protected]) 

     Chicago Regional Office     
          175 West Jackson Blvd., Suite 1450 
          Chicago, Illinois 60604 
          Phone: (312) 353-7390 | Fax: (312) 353-7398 
 
     Attorneys for Plaintiff 

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