Crypto Lender Abra Settles Lawsuit, Will Reopen Customer Withdrawals

CryptoNews.com

2024-01-24 07:55:07

Brian Yue

Last updated:

January 23, 2024 22:50 EST | 1 min read

Source: PixabayCrypto lender Abra has reached a tentative settlement with the Texas State Securities Board.

According to a document published January 22nd, Abra has agreed to reimburse the assets invested by the state’s residents.

The document highlights that Abra has begun winding down its U.S. retail operations. Clients holding balances exceeding $10 will receive notifications, allowing them seven days to withdraw their assets. Unclaimed funds will be converted to fiat currency and distributed to remaining investors in Texas.

With services such as Abra Earn and Abra Boost, the lending firm assured users of interest on their digital asset deposits. In return, the company generated profits by lending these funds.

The offer is still featured on the Abra website, asserting that users can receive up to 10% interest compounded daily and paid out every Monday.

On June 15, 2023, the Texas State Securities Board (TSSB) issued an emergency cease and desist order, accusing Abra CEO Bill Barhydt and his company of committing securities fraud and engaging in deception regarding the sale of investment products.

The state regulator has also claimed that the firm was insolvent, or nearly insolvent, as of March 31, 2023.

At the time the TSSB initiated legal actions, the lending firm held $13.6 million in crypto assets for over 12,000 investors in the United States, according to the Out of this total, approximately $1.8 million belonged to around 1,600 residents of Texas.

Abra constitutes a cluster of companies overseen by Barhydt, a crypto entrepreneur.

The settlements encompass four distinct entities associated with the brand: Plutus Financial Holdings, Plutus Financial, Plutus Lending, and Abra Boost.

Abra’s CEO Responds

In a statement on X, Barhydt confirmed the settlement, asserting that Abra “has never (ever) frozen withdrawals for US users.”

The CEO added that that no Texas users were harmed through its Earn and Boost programs, which he claims were voluntarily terminated in the U.S. during 2023.

The dismissal of legal actions is contingent upon the final return of assets to approximately 875 users in Texas, amounting to roughly $500,000, the CEO continued, noting that Abra has already processed withdrawals surpassing $9 million for over 2000 residents in Texas as part of this ongoing resolution process.

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