Cryptocurrency company Abra and its CEO, William “Bill” Barhydt, settled with 25 state financial regulators in the United States for operating a crypto business without obtaining appropriate licenses. Apparently, it offered crypto trading and investing services without any license.
Announced yesterday (Wednesday) by the Conference of State Bank Supervisors (CSBS), the participating states in the settlement are Alaska, Alabama, Arizona, Arkansas, Connecticut, District of Columbia, Georgia, Idaho, Iowa, Maine, Minnesota, Mississippi, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Vermont, Washington, and West Virginia.
Returning Customer Funds
Under the terms of the settlement, Abra will return up to $82.1 million in crypto to US customers in each of the settling states and also agreed to stop accepting crypto allocations from customers all over the country. Notably, the company already ceased offering buying, selling, or trading cryptocurrencies for US customers on 15 June 2023.
Furthermore, Barhydt agreed not to be involved in any money transmitter or money services business licensed or required to be licensed in the settled states for the next five years. However, he can be a passive investor.
“State financial regulators take their role to protect consumers and prevent unlicensed activity seriously,” said CSBS Chair and Washington State Department of Financial Institutions Director Charlie Clark. “Companies that do not operate within the bounds of state laws will be held accountable.”
Having launched a crypto-focused wealth advisor in the United States, clients are able to get investment exposure to 100+ digital assets, earn yield, and access DeFi based loans. Here, our CEO @billbarX and @APompliano discuss the future of Abra and what it means to harness… pic.twitter.com/p3T8pIqdjo
— Abra (@AbraGlobal) June 26, 2024
Barhydt founded Abra in 2014 and offers cryptocurrency trading, lending, and borrowing services to retail and institutional investors. It provides investment into Abra Earn and Abra Boost, which allegedly contained misleading statements.
The company came into regulatory scrutiny in mid-2013 as the Texas state regulator issued a cease-and-desist order, claiming that the company had been insolvent since at least 31 March 2023. The regulator further claimed that Abra "made offers of investments in Abra Earn in Texas containing statements that were materially misleading or otherwise likely to deceive the public."
In January, the Texas state regulator settled with the company, which agreed to return the frozen funds to the customers. At that time, it held $13.6 million in crypto assets for roughly 12,000 investors from the state.
Abra’s Response
Meanwhile, following the latest settlement with 25 states, Barhydt clarified in an X post that “Abra Private and Abra Prime are fully operational in the USA and International.”
https://t.co/jpAtQ5Btq5
— Bill Barhydt (@billbarX) June 26, 2024
“Back in January we announced settlements with Texas and certain state securities regulators around Abra Earn. Today we've finished the last piece of this by signing a term sheet with state MT regulators,” he added.
“Since Abra stopped offering the app over a year ago in the US this agreement doesn't directly affect any of you. No penalties are being paid as part of this agreement as no users were harmed in any way.”
Cryptocurrency company Abra and its CEO, William “Bill” Barhydt, settled with 25 state financial regulators in the United States for operating a crypto business without obtaining appropriate licenses. Apparently, it offered crypto trading and investing services without any license.
Announced yesterday (Wednesday) by the Conference of State Bank Supervisors (CSBS), the participating states in the settlement are Alaska, Alabama, Arizona, Arkansas, Connecticut, District of Columbia, Georgia, Idaho, Iowa, Maine, Minnesota, Mississippi, Nevada, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Vermont, Washington, and West Virginia.
Returning Customer Funds
Under the terms of the settlement, Abra will return up to $82.1 million in crypto to US customers in each of the settling states and also agreed to stop accepting crypto allocations from customers all over the country. Notably, the company already ceased offering buying, selling, or trading cryptocurrencies for US customers on 15 June 2023.
Furthermore, Barhydt agreed not to be involved in any money transmitter or money services business licensed or required to be licensed in the settled states for the next five years. However, he can be a passive investor.
“State financial regulators take their role to protect consumers and prevent unlicensed activity seriously,” said CSBS Chair and Washington State Department of Financial Institutions Director Charlie Clark. “Companies that do not operate within the bounds of state laws will be held accountable.”
Having launched a crypto-focused wealth advisor in the United States, clients are able to get investment exposure to 100+ digital assets, earn yield, and access DeFi based loans. Here, our CEO @billbarX and @APompliano discuss the future of Abra and what it means to harness… pic.twitter.com/p3T8pIqdjo
— Abra (@AbraGlobal) June 26, 2024
Barhydt founded Abra in 2014 and offers cryptocurrency trading, lending, and borrowing services to retail and institutional investors. It provides investment into Abra Earn and Abra Boost, which allegedly contained misleading statements.
The company came into regulatory scrutiny in mid-2013 as the Texas state regulator issued a cease-and-desist order, claiming that the company had been insolvent since at least 31 March 2023. The regulator further claimed that Abra "made offers of investments in Abra Earn in Texas containing statements that were materially misleading or otherwise likely to deceive the public."
In January, the Texas state regulator settled with the company, which agreed to return the frozen funds to the customers. At that time, it held $13.6 million in crypto assets for roughly 12,000 investors from the state.
Abra’s Response
Meanwhile, following the latest settlement with 25 states, Barhydt clarified in an X post that “Abra Private and Abra Prime are fully operational in the USA and International.”
https://t.co/jpAtQ5Btq5
— Bill Barhydt (@billbarX) June 26, 2024
“Back in January we announced settlements with Texas and certain state securities regulators around Abra Earn. Today we've finished the last piece of this by signing a term sheet with state MT regulators,” he added.
“Since Abra stopped offering the app over a year ago in the US this agreement doesn't directly affect any of you. No penalties are being paid as part of this agreement as no users were harmed in any way.”
