Crypto Lender Abra Reaches Settlement with Texas State Securities Board
Crypto lender Abra has reached a tentative settlement with the Texas State Securities Board. According to a document published on January 22nd, Abra has agreed to reimburse the assets invested by the state’s residents. The document highlights that Abra has begun winding down its U.S. retail operations, and clients holding balances exceeding $10 will receive notifications to withdraw their assets within seven days. Unclaimed funds will be converted to fiat currency and distributed to remaining investors in Texas.
Abra’s Interest-Generating Services
With services such as Abra Earn and Abra Boost, the lending firm assured users of interest on their digital asset deposits. In return, the company generated profits by lending these funds. The offer is still featured on the Abra website, asserting that users can receive up to 10% interest compounded daily and paid out every Monday.
Texas State Securities Board Accusations
On June 15, 2023, the Texas State Securities Board issued an emergency cease and desist order, accusing Abra CEO Bill Barhydt and his company of securities fraud and deception regarding the sale of investment products. The state regulator also claimed that the firm was insolvent or nearly insolvent as of March 31, 2023.
The Settlement and Entities Involved
At the time legal actions were initiated, Abra held $13.6 million in crypto assets for over 12,000 investors in the United States, with approximately $1.8 million belonging to around 1,600 residents of Texas. The settlements encompass four distinct entities associated with the brand: Plutus Financial Holdings, Plutus Financial, Plutus Lending, and Abra Boost.
Abra CEO’s Response
In a statement on X, Abra CEO Bill Barhydt confirmed the settlement, asserting that Abra “has never (ever) frozen withdrawals for US users.” The CEO added that no Texas users were harmed through its Earn and Boost programs, which he claims were voluntarily terminated in the U.S. during 2023. The dismissal of legal actions is contingent upon the final return of assets to approximately 875 users in Texas, amounting to roughly $500,000. Abra has already processed withdrawals surpassing $9 million for over 2000 residents in Texas as part of this ongoing resolution process.
Hot Take: Crypto Lender Abra Settles Lawsuit, Will Reopen Customer Withdrawals
Crypto lender Abra has reached a settlement with the Texas State Securities Board, agreeing to reimburse assets invested by Texas residents. Abra will wind down its U.S. retail operations and allow clients to withdraw their assets within seven days. Unclaimed funds will be converted to fiat currency and distributed to remaining investors. Despite accusations of securities fraud and insolvency, Abra’s CEO asserts that the company never froze withdrawals for U.S. users and no harm was done to Texas users through its interest-generating programs. The dismissal of legal actions is dependent on returning assets to affected users.
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