(Bloomberg) -- The US Securities and Exchange Commission is suing Beaxy.com for operating an unregistered exchange, brokerage and clearing business simultaneously, the first such action by the agency against a cryptocurrency platform. 

SEC Chair Gary Gensler has frequently admonished digital asset firms for conducting multiple business operations that he says should normally be separate companies. Gensler has called on companies to break up and separately register their various operations. 

The complaint, filed in a federal court in Chicago, comes as the SEC has been ramping up enforcement against larger participants in the industry, including most recently notifying Coinbase Global Inc. of its intent to sue over unregistered digital asset offerings and over other issues. 

The markets watchdog is also suing Beaxy’s founder, Artak Hamazaspyan, for securities fraud. The company raised $8 million through offering its own crypto token, BXY, and Hamazaspyan allegedly misappropriated $900,000 for gambling and other uses, the SEC alleged in a Wednesday statement. 

“When a crypto intermediary combines all of these functions under one roof — as we allege that Beaxy did — investors are at serious risk,” SEC Enforcement Director Gurbir Grewal said in a statement. “The blurring of functions and the lack of registrations meant that regulations designed to protect investors were not followed or even recognized by Beaxy.”

Separately, the agency said it had reached a settlement with the individuals currently managing Beaxy, Nicholas Murphy and Randolph Bay Abbott. They took over the platform from Hamazaspyan, and operated it — still without registering — through their company Windy Inc., the SEC said in its statement. The agency also alleged that a group of companies operated by Brian Peterson, including Braverock Investments LLC, acted as market makers for the platform, allegedly acting as unregistered dealers.

The latter group of men and companies neither admitted nor denied the allegations. Windy, Abbot and Murphy agreed to pay $79,200 in civil penalties. Peterson and his companies agreed to pay $86,000 in fines. 

Beaxy agreed to shutter its website as part of a settlement. The company’s main web page on Wednesday said it had ceased operations “due to the uncertain regulatory environment surrounding our business.”

“Our clients are pleased to have put this matter behind them and are looking forward to the continuing development of cryptocurrency and blockchain and its integration into globally regulated markets,” Yankun Guo and Timothy Belevetz, attorneys at Ice Miller representing Windy, Abbott, Murphy, Peterson and Braverock, said in an emailed statement. 

The SEC is litigating the securities fraud charges against Hamazaspyan and against him and Beaxy Digital, Ltd., the company he controlled before it was taken over by Windy, for the unregistered offering of the BXY token. Hamazaspyan didn’t immediately respond to a request for comment.   

(Updates with attorneys’ comment in second to last paragraph.)

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