Crypto investment platform Abra and its CEO, William “Bill” Barhydt, have reached a settlement with 25 state financial regulators for operating without the necessary licenses. As a result of this settlement, Abra has agreed to return up to $82.1 million in cryptocurrency to its U.S.-based customers in the states involved.
The Conference of State Bank Supervisors (CSBS) made the announcement regarding the settlement, outlining the terms that Abra must adhere to moving forward. One of the key points in the agreement is that Abra will no longer accept cryptocurrency allocations from U.S. customers using the Abra Trade platform. Additionally, the company will cease all activities related to buying, selling, or trading cryptocurrencies for Abra Trade customers in the United States.
Furthermore, William Barhydt has agreed to refrain from any involvement in money transmitting or money services businesses in the 25 states included in the settlement, except as a passive investor, for a period of five years. This settlement serves as a reminder that state financial regulators are committed to protecting consumers and enforcing state laws to hold companies accountable for their actions.
States such as Washington, Arkansas, and Connecticut are among those involved in the settlement with Abra. This agreement comes on the heels of previous settlements that Abra has made with state securities regulators in New Mexico and Texas for selling unregistered securities.
An Abra spokesperson expressed the company’s satisfaction with the negotiated Term Sheet with the Money Transmitters Regulators Association, which will resolve all state-related issues regarding the Abra App in the U.S. from March 2021 to June 2023. The spokesperson highlighted that the majority of assets held by U.S. retail customers through the Abra App have already been returned, totaling over $250 million.
While Abra continues its operations in the United States through Abra Capital Management, an SEC-registered investment advisor, the company remains committed to providing services that allow clients to invest in cryptocurrency, earn yield, stake, and borrow against their crypto holdings. CEO Bill Barhydt took to Twitter to assure customers that Abra Private and Abra Prime services are fully operational in both the U.S. and internationally, with exciting announcements on the horizon.
It is important to note that the collaboration between state securities regulators and state financial regulators played a crucial role in bringing the unlicensed activities of Abra to light. The multi-state settlement allows for additional states to join in holding Abra accountable for its actions.
In conclusion, the settlement between Abra and state financial regulators underscores the importance of compliance with licensing requirements and regulations in the cryptocurrency industry. Customers can rest assured that efforts are being made to protect their interests and ensure transparency within the market.