The Abra cryptocurrency platform, along with its affiliated companies and CEO William Barhydt, has reached an agreement with 25 U.S. states for conducting operations without the necessary licenses. This settlement follows an investigation carried out by a coalition of regulators from eight states.
Regulatory bodies from Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington concluded that Abra had been running an unlicensed mobile application for the buying, selling, and trading of cryptocurrencies.
A consortium of several states, spearheaded by Washington, played a pivotal role in negotiating the settlement, as outlined in a statement by the Conference of State Bank Supervisors (CSBS). As per the terms of the settlement, the states will forgo fines amounting to $250,000 each, which will be used to cover the expenses related to customer reimbursements. Abra customers in the participating states will receive refunds totaling up to $82.1 million along with the return of all remaining virtual assets.
Barhydt, the primary shareholder of Abra, agreed to refrain from engaging in any activities related to licensed money transmission or financial services businesses, except in the capacity of an investor, within these states for a period of five years.
In addition to the aforementioned states, the current participants in the settlement include Alaska, Alabama, Arizona, District of Columbia, Idaho, Iowa, Maine, Minnesota, Mississippi, Nevada, New Mexico, North Carolina, North Dakota, Rhode Island, South Carolina, South Dakota, and West Virginia. Other states are welcome to join the settlement as it progresses towards completion, as indicated in the statement. A spokesperson for Abra mentioned in a statement reported by Reuters:
Abra had previously come under scrutiny by state securities regulators, who conducted a parallel inquiry that resulted in the recovery of $13.6 million for Abra customers, as stated by the Washington State Department of Financial Institutions.
Subsequent to ceasing its cryptocurrency transactions with customers in the United States on June 15, 2023, Abra Trade halted the acceptance of assets. The CSBS Non-Depository Supervisory Committee briefed the states on the collective actions being taken against Abra and urged individual states not to take independent enforcement measures, a call that was not entirely adhered to.
Abra’s challenges did not originate from these recent events. In 2020, the Securities and Exchange Commission levied a $300,000 fine on Abra for trading in synthetic assets. Furthermore, in June 2023, Texas regulators issued an emergency cease-and-desist order against Abra, alleging insolvency. Following a settlement with the state of Texas in January, Abra Earn and Abra Boost customers in Texas received reimbursements.
Despite these setbacks, an Abra spokesperson informed Cointelegraph that Abra persists in its operations in the United States through SEC-registered Abra Capital Management.