Crypto investment platform Abra has agreed to settle with 25 state financial regulators over allegations of operating without proper licensing.
The settlement requires Abra and its CEO William Barhydt to halt their crypto-related services for U.S. Abra Trade customers and return $82 million in virtual assets to its customers, according to the Conference of State Bank Supervisors (CSBS).
The agreement involves regulators from Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington State. These regulators found that Abra operated a mobile application for buying, selling, trading, and investing in crypto without the necessary licenses.
“State financial regulators take their role to protect consumers and prevent unlicensed activity seriously,” said CSBS Chair and Washington State Department of Financial Institutions Director Charlie Clark. “Companies that do not operate within the bounds of state laws will be held accountable.”
To prioritize customer reimbursement, the states involved in the settlement have agreed to forgo the $250,000 penalty per jurisdiction. This move aims to help Abra return the $82 million to affected customers.
Previous regulatory issues
Earlier this year, the Texas State Securities Board reported a settlement in principle with Abra and its CEO over allegations of securities fraud related to the Abra Earn and Abra Boost programs. Abra consists of four affiliated companies controlled by Barhydt, offering interest-bearing crypto services.
“Abra is pleased to enter into a Term Sheet negotiated with a working group from the Money Transmitters Regulators Association regarding the Abra App that Abra previously offered in the US. The corresponding consent orders will settle all state matters related to the Abra App in the US for the period from March 2021 to June 2023,” the company said in a statement.
Despite the settlement, Abra continues to operate in the U.S. through its Securities and Exchange Commission-registered investment adviser, Abra Capital Management, which allows customers to invest in crypto, earn yield, stake, and borrow.
