Abra Settles With Texas Securities Authorities After Enforcement Action
Crypto investment platform Abra settled in principle with Texas securities regulators, part of which requires the company to allow its customers to withdraw their assets.
Abra was previously accused of deceiving customers and violating securities laws through the offering of its interest-bearing products.
Abra to Return Crypto Assets to Investors
The Texas State Securities Board (TSSB) announced the settlement with Abra – a company comprising four entities controlled by CEO William Barhydt – in a press release.
According to the settlement terms, Abra is expected to notify clients with balances of over $10 and give them seven days to enable them to withdraw their assets from the platform. Any remaining assets not claimed within the period will be converted to fiat and sent to Texas investors.
As stated in the press release, Abra has been given a 30-day ultimatum to fulfill its obligations. A statement from the agency’s Enforcement Director, Joe Rotunda, reads:
“Our agency recognizes that financial losses can have a devastating impact on retirement planning, college savings, and even the ability to pay routine bills and expenses. When settling this matter, we prioritized returning money to retail investors. Our division stands ready to assist Texans throughout the process.”
No Frozen Withdrawals, Says Abra CEO
Abra CEO William Barhydt announced the settlement on X, stating that the company cooperated with Texas regulators following the latter’s enforcement action against it, while also clarifying that the firm did not freeze withdrawals for US customers.
We’re pleased to announce that Abra has entered into an agreement under which Texas will agree to dismiss their actions against Abra from 2023. Abra worked with regulators over the course of many months to ensure that both parties were comfortable with our obligations to…
— Bill Barhydt (@billbarX) January 23, 2024
As previously reported by CryptoPotato in June 2023, TSSB filed an “emergency cease and desist order” against Abra and Barhydt, alleging that they violated securities laws and deceived investors through their interest-bearing cryptocurrency products Abra Earn and Abra Boost.
According to the allegations, the entities collectively known as Abra concealed information about their financial status, with the regulator stating that the platform was either insolvent or nearing insolvency as of March 2023. The agency further claimed that Abra made secret transfers to the cryptocurrency exchange Binance.
At the time of the cease and desist order, the company held about $13.6 million worth of crypto assets belonging to 12,000 customers based in the United States.
Meanwhile, Barhydt said the platform “already processed over $9M in withdrawals to over 2000 TX residents,” with a balance of approximately $500,000 balance to be returned to over 800 Texas customers.
“As part of the settlement in principle, Abra and Mr. Barhydt will consent to the entry of a Consent Order by the Securities Commissioner, and the agency will dismiss actions filed on or after June 15, 2023.”
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