Cryptocurrency Exchange Abra Settlement with the Securities and Exchange Commission The company was charged on Monday with failing to register the offer and sale of its lending product, “Abra Aarn,” and with operating an unregistered investment company.
Abra launched its Abra Earn offering in 2020, allowing U.S. investors to lend cryptocurrency to Abra and receive interest. At its peak, Abra Earn had around $600 million in assets, mostly from U.S. investors. The program ended in 2023.
The SEC said Abra “automatically” promised interest on crypto assets and alleged that Abra Earn was offered and sold as a security without the required SEC registration.
“[A]”Bra sold nearly $500 million in securities to U.S. investors without complying with registration laws designed to enable investors to receive sufficient, accurate information and make informed decisions before investing,” Stacey Bogart, assistant director of the SEC’s enforcement division, said in a statement.
“Further compounding the potential harm to investors is that Abra allegedly sold its own securities while circumventing applicable provisions of the Investment Company Act that provide many important protections to investors, including minimizing conflicts of interest,” she said. “This case demonstrates once again that enforcement investigations are driven by economic realities, not superficial labels.”
In a post on X (formerly Twitter) on Monday, Abra CEO Bill Barhydt said: Since the program ended, all assets and interest have been returned to Abra Earn clients, and he called the settlement “a great success.”Acceptable Results.”
“No U.S. retail clients have been harmed or lost assets as a result of this service,” Barhyde wrote. “Abra Private is currently offering digital asset services, including both yield and staking services, in the U.S. as a registered investment advisor and is growing successfully.”
Abra Private launched in April alongside Abra Prime. Both companies serve retail and institutional clients, respectively, and operate with SEC authorization as registered investment advisers.
Abra Agreed to repay customers in June It paid out $82 million worth of cryptocurrency as part of a settlement with 25 states for operating without a license.
