Crypto Firm Abra Settles with 25 US States Over Unlicensed Operations
Summary:
The cryptocurrency firm Abra, its subsidiaries, and CEO, William Barhydt, have agreed to a settlement with 25 US states for operating without necessary licenses. The settlement arose from an eight-state-led investigation into Abra's unauthorized cryptocurrency mobile application. As per the settlement, Abra customers in the concerning states are to be refunded up to $82.1 million. This is not the first scrutiny for Abra, which had previously been fined and handed a cease-and-desist order, leading to customer repayments.
The cryptocurrency firm Abra, along with its subsidiaries and its CEO, William Barhydt, have settled with 25 American states for operating without proper licenses. This resolution follows an investigation spearheaded by a group of regulators from eight states. Financial overseers from eight states, Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington, concluded that Abra was running an unauthorised mobile app for purchasing, selling and trading cryptocurrencies.
Washington took the lead in negotiating the settlement, as disclosed in a statement from the Conference of State Bank Supervisors (CSBS). The agreement stipulates that the states will not demand each to pay $250,000 in fines to handle customer reimbursements. Up to $82.1 million, as well as remaining digital assets, will be refunded to Abra's customers in the settling states.
Barhydt, who holds the majority of Abra's equity, has agreed to refrain from participating in any licensed money transmission or money services business activities in these states for a period of five years, unless he is an investor.
The states that have agreed to the settlement so far include Alaska, Alabama, Arizona, Arkansas, Connecticut, District of Columbia, Georgia, Idaho, Iowa, Maine, Minnesota, Mississippi, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Vermont, Washington, and West Virginia. As the case nears its resolution, other states may opt to join the settlement, according to the statement.
In a statement shared with Reuters, an Abra representative stated, “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 U.S.".
This is not the first time that Abra has been investigated by state securities regulators. A previous investigation resulted in a restitution of $13.6 million to Abra customers.
As of June 15, 2023, Abra Trade halted accepting assets and conducting cryptocurrency transactions with US customers. The CSBS Non-Depository Supervisory Committee alerted states about the joint action against Abra, encouraging individual states to refrain from enforcement actions—however, this was only partially observed.
Abra's issues started even before this, with the company being fined $300,000 by the Securities and Exchange Commission in 2020 for synthetic assets trading. Then, in June 2023, the Texas regulators served Abra with an emergency halt order, alleging insolvency. Following a January settlement, Abra's customers in Texas were refunded their funds.
Published At
6/27/2024 12:45:00 AM
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