Crypto Firm Abra Settles with Texas Securities Board, Plans to Return Investors' Assets
Summary:
In a preliminary settlement with the Texas State Securities Board, crypto lending firm Abra, allegedly insolvent since March 2023, has agreed to return investors' assets. The company is beginning the wind-down of its U.S. retail operations, urging clients with balances over $10 to withdraw their investments within a week. The remainder will be converted to fiat currency and returned to Texas investors. The company is controlled by crypto entrepreneur Bill Barhydt and faced accusations of securities fraud and deceptive sales practices. Abra held $13.6 million of crypto for 12,000 U.S. investors when Texas initiated action.
Abra, a crypto lending business reported to be insolvent since March 2023, has come to a preliminary settlement agreement with the Texas State Securities Board. The business is expected to restore the invested assets of Texan clients. The Securities Board disclosed the official confirmation of this settlement on January 22. Under its terms, Abra will start winding down its retail operations across the US and inform customers with a balance of over $10 to retrieve their assets within a week. Assets that remain unclaimed will be liquidated to standard currency and handed over to the remaining investors in Texas.
Cryptocurrency entrepreneur Bill Barhydt is in control of the Abra portfolio. The agreement lists four associated entities: Plutus Financial Holdings Inc., Plutus Financial Inc., Plutus Lending LLC, and Abra Boost LLC. The company has previously offered products such as Abra Earn and Abra Boost, promising users returns on their digital deposits while it profited from loaning these funds. Such an offer still appears on the Abra website, claiming daily compounding of up to 10% interest, paid out every Monday.
However, on June 15, the Texas State Securities Board issued an urgent stop and desist order, charging Barhydt and Abra with securities fraud, as well as deceptive practices concerning the sale of investment products. The regulator also noted the insolvency or near-insolvency of the company since March 31.
The settlement agreement discloses that when Texas initiated action, Abra was holding crypto assets worth $13.6 million for over 12,000 US investors, with Texas residents owning only $1.8 million of this total. Abra's X (ex Twitter) account has been inactive since June 2023. Bill Barhydt acknowledged the settlement but was careful to clarify that Abra has never frozen US user withdrawals and had of its own accord, discontinued the Earn and Boost programs in 2023.
Published At
1/24/2024 12:55:16 PM
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