Highlights:
- Crypto firm Abra to refund $82.1 million to customers in 25 states as part of a regulatory settlement.
- CEO Bill Barhydt barred from financial services in these states for five years.
- Abra halts unlicensed crypto transactions, shifting focus to accredited investor services.
Abra, a cryptocurrency investment platform, has settled with financial regulators from 25 U.S. states for failing to obtain necessary operating licenses. According to the Conference of State Bank Supervisors (CSBS), the settlement requires Abra to refund up to $82.1 million to affected customers. The states involved in the settlement, including Washington, Texas, Georgia, and Ohio, have waived monetary penalties to ensure full repayment to customers.
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🚨Crypto firm Abra reaches a settlement with 25 US states for operating without proper licensing.
As part of the settlement, Abra is required to change its operations within these states significantly. pic.twitter.com/DpYFigXnkY
— CILLIONAIRE.COM (@cillionaire_com) June 27, 2024
Abra’s Licensing Failures and Settlement Terms
Abra’s unlicensed operations were first revealed by an investigation led by financial regulators from Washington, Arkansas, Georgia, and Texas. The investigation revealed that Abra offered crypto transactions through its mobile app without the required state licenses. As a result, Abra agreed to cease accepting cryptocurrency from U.S. customers on its Abra Trade platform and stop all related buying and trading activities.
The settlement also includes a five-year ban on Abra’s CEO, Bill Barhydt. He is prohibited from participating in any money transmission or similar financial services within the 25 states involved. Despite this, Barhydt attempted to downplay the settlement, stating on X that “no penalties are being paid as part of this agreement as no users were harmed in any way.”
— Bill Barhydt (@billbarX) June 26, 2024
Charlie Clark, Chair of CSBS, emphasized the importance of regulatory compliance, stating,
State financial regulators take their role to protect consumers and prevent unlicensed activity seriously. Companies that do not operate within the bounds of state laws will be held accountable.
Refunds and Operational Changes
Under the settlement terms, Abra must return any remaining cryptocurrency holdings to affected customers in the involved states. This action follows Abra’s decision last year to stop U.S. customers from buying, selling, or depositing crypto on its Abra Trade platform.
Abra expressed satisfaction with the settlement, stating that the negotiations with the Money Transmitters Regulators Association concluded amicably. Abra continues to operate in the U.S. despite the regulatory challenges through Abra Capital Management, an SEC-registered investment advisor.
New Developments for Abra
In addition to resolving its regulatory issues, Abra launched “Abra Prime” and “Abra Private” platforms earlier this year. Abra Prime caters to institutions like hedge funds and venture capital firms, while Abra Private offers custom wealth management solutions for high-net-worth individuals and trusts. Both platforms benefit from Abra’s recent SEC approval to operate as an investment advisor.
Big News! Today we’re announcing the launch of Abra Private.
Targeted at high net worth individuals, family offices, corporate treasuries and non profits, this service is offered by our new SEC-registered investment advisor (RIA), Abra Capital Management (ACM). Abra Private…
— Abra (@AbraGlobal) April 17, 2024
State-by-State Impact
Washington was the first state to publish its consent order on June 26, revealing that 706 users in the state have a balance of $116,000.78 remaining on the platform. Washington noted that customers have received $13.6 million to date.
The CSBS highlighted the roles of Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and other states in the settlement. We expect additional states to issue their consent orders in the coming weeks or months. Furthermore, more states may join the settlement as the case concludes.
This settlement marks a significant step in enforcing regulatory compliance in the cryptocurrency industry. The crypto firm Abra agreed to refund $82.1 million to customers. Additionally, its CEO’s five-year ban from participating in similar financial services highlights the importance of adhering to state laws.
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