Crypto lender Abra recently came to an agreement with the Texas State Securities Board to address the frozen funds of customers. The resolution follows a regulatory action by the board, accusing Abra of securities fraud through an emergency cease and desist order.
Details of the Agreement
As per the settlement agreement disclosed on Monday, the Texas regulator mandated Abra to return assets to affected Texans and other U.S. investors. The board’s intervention in June 2023 was in response to alleged misleading investment schemes involving Abra, including its CEO, Bill Barhydt.
- The lender positioned itself as a “crypto bank,” marketing products like Abra Boost as a means for crypto-based savings.
- Plutus Financial, another entity controlled by Barhydt, was accused of covertly moving assets to Binance, according to the regulator’s claims.
“The settlement addresses their alleged offer and sale of interest-bearing cryptocurrency depository products referred to as Abra Boost and Abra Earn,” the agreement highlighted.
Investors affected by the incident will now be able to withdraw assets from their accounts following this settlement. To further protect investors, the board has instructed Abra to convert unclaimed assets to fiat currency before issuing checks to Texas investors.
Reaction from Texas Securities Commissioner
Texas Securities Commissioner Travis J. Iles commended the existing securities laws in the state, stating, “Existing securities laws are well equipped to protect investors purchasing traditional products such as stocks or bonds as well as new and innovative securities tied to digital assets and evolving technologies.”
The commissioner expressed satisfaction in the effective enforcement of these laws, highlighting the importance of investor protection. Moreover, he praised the regulatory team’s focus on returning money to retail investors.
“When settling this matter, we prioritized returning money to retail investors,” emphasized Joe Rotunda, the Enforcement Director. He further warned investors to stay vigilant and follow any directives issued by Abra and the regulatory agency.
