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Crypto lender Abra has reached an agreement with the Texas State Securities Board to return customers’ frozen funds. The ruling comes after the authority filed an emergency cease and desist order and accused the company of securities fraud.
Per the settlement agreement published Monday, the Texas regulator ordered Abra to return assets to Texans and other U.S. investors.
In June 2023, the Board accused Abra and related parties including its CEO, Bill Barhydt, of making misleading investment offers. The lender claimed itself as a “crypto bank,” promoting respondent Abra Boost as a “product which allows you to basically have crypto-based savings.”
Further, the regulator also accused the plaintiffs including Plutus Financial, also controlled by Barhydt, for secretly transferring holdings to Binance.
The Monday settlement announcement noted that the ruling would address these frauds. “The settlement addresses their alleged offer and sale of interest‐bearing cryptocurrency depository products referred to as Abra Boost and Abra Earn.”
The settlement will help investors to withdraw assets from their accounts. Additionally, the Board has ordered Abra to convert unclaimed assets to fiat currency before sending checks to Texas investors.
Commenting on the enforcement action, Texas Securities Commissioner Travis J. Iles praised the state’s “well-equipped” securities laws.
“Existing securities laws are well equipped to protect investors purchasing traditional products such as stocks or bonds as well as new and innovative securities tied to digital assets and evolving technologies. I am pleased to see those tools effectively utilized in Texas.”
Repaying 12,000 Investors
According to the regulator’s claims, Abra held cryptocurrencies worth $13.6 million on behalf of more than 12,000 U.S. investors. This includes crypto assets of 1,600 Texas residents that valued approximately $1.8 million.
Joe Rotunda, the Enforcement Director, noted that such heavy financial loses can have a “devastating impact” on investors’ daily lives.
“When settling this matter, we prioritized returning money to retail investors,” Rotunda stressed. Further, the enforcement team has urged local investors to regularly check their mails for correspondence from the agency and instructions from Abra.
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