Following regulatory scrutiny, crypto lender Abra has agreed to a settlement. The settlement, which focuses on Abra’s alleged unregistered securities offerings, will see the company returning assets to Texan investors.
Abra Agrees to Refund Texas Investors in Settlement Over Crypto Offerings
The Texas State Securities Board (TSSB) has reached a settlement in principle with crypto lender Abra, following allegations of unregistered securities offerings. As per the agreement, Abra will return assets to Texan investors, with an opportunity for other U.S. clients to reclaim their investments.
Securities Commissioner Travis J. Iles announced the settlement, highlighting the resolution of concerns regarding Abra’s interest-bearing cryptocurrency products, Abra Boost and Abra Earn. The enforcement actions, led by the Texas State Securities Board’s Enforcement Director Joe Rotunda, accused Abra and its affiliates of offering these products without proper registration, potentially putting investors at risk.
The settlement mandates that investors can withdraw assets from their accounts. Abra is also required to convert unclaimed assets to fiat currency and send checks to Texas investors. The company has been given 30 days from the settlement date to fulfill these obligations.
Abra, operated by Plutus Financial Holdings Inc., Plutus Financial Inc., Plutus Lending LLC, and Abra Boost LLC, and led by William “Bill” Barhydt, offered these programs to all U.S. clients, with Abra Boost specifically targeted at accredited investors. These programs enabled investors to earn interest by depositing digital assets with Abra, which were then loaned to institutional borrowers.
The TSSB’s investigation, which began in June 2023, revealed that Abra held cryptocurrencies valued at approximately $13.6 million on behalf of over 12,000 U.S. investors, including $1.8 million from around 1,600 Texas residents. Following the enforcement actions, Abra initiated the winding down of its U.S. retail operations, a process now expedited by the settlement.
“When settling this matter, we prioritized returning money to retail investors,” said Joe Rotunda. He urged clients to check their emails for instructions from Abra regarding the withdrawal process.
In addition to returning assets, Abra and Barhydt have agreed to a Consent Order by the Securities Commissioner. The settlement, contingent upon Abra’s successful fulfillment of terms, will lead to the dismissal of actions filed against the company since June 15, 2023.
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