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Crypto firm Abra settles with state regulators over not licensing its mobile app

Crypto firm Abra settles with state regulators over not licensing its mobile app

The BlockThe Block2024/06/26 21:31
By:The Block

Quick Take The settlement, which also names its CEO, William Barhydt, requires Abra to stop making, buying, selling, or trading crypto to U.S. Abra Trade customers and requires the firm to return $82 million in virtual assets to customers. A group of state regulators investigated Abra and found that the firm operated a mobile application for buying, selling, trading, and investing in crypto and didn’t get the required licenses.

Crypto company Abra agreed to settle with 25 state financial regulators who say the firm operated without being properly licensed. 

The settlement, which also names its CEO William Barhydt, requires Abra to stop making, buying, selling or trading crypto to U.S. Abra Trade customers and says the firm must return $82 million in virtual assets to customers, according to a statement released by the Conference of State Bank Supervisors. The organization comprises 50 states and other U.S. territories and supervises 79% of all U.S. banks. 

A group of state financial regulators from Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington State investigated Abra and said the firm operated a mobile application for buying, selling, trading and investing in crypto and didn't get the required licenses, CSBS said. 

“State financial regulators take their role to protect consumers and prevent unlicensed activity seriously,” CSBS Chair and Washington State Department of Financial Institutions Director Charlie Clark said in a statement. “Companies that do not operate within the bounds of state laws will be held accountable.” 

CSBS said the states involved in the settlement agreed to forgo the $250,000 penalty per jurisdiction to help repay customers. 

Abra has gotten in the crosshairs with other state regulators. Earlier this year, the Texas State Securities Board said it had settled in principle with the firm and its CEO over allegations that it committed securities fraud regarding Abra Earn and Abra Boost.  Abra is the common name for four affiliated companies controlled by Barhydt, which offered interest-bearing Abra Earn and Abra Boost programs.

“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," an Abra spokesperson said in an email. 

Abra has previously said it was restricting some of its U.S. services due to regulatory uncertainty . 

The spokesperson said 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. 


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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