Cryptocurrency platform Abra, its associated companies and CEO William Barhydt reached a settlement with 25 U.S. states for operating without the appropriate licenses. The settlement comes after a working group of regulators from eight states led an investigation into the company.
Financial regulators from Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington determined that Abra operated an unlicensed mobile app for buying, selling and trading crypto.
Multiple states benefit from the work of a few
Washington led the group in negotiating the settlement, according to a statement by the Conference of State Bank Supervisors (CSBS). Under the settlement, the states will not require penalties of $250,000 each to cover costs of customer repayment. Up to $82.1 million and all remaining virtual assets will be returned to Abra customers in the settling states.
Barhydt, Abra’s main equity holder, agreed not to take part in any licensed money transmitter or money services business activities, other than as an investor, in the states for five years.
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The states currently participating 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.
Other states can join in the settlement “as the case comes to a close,” the statement said. An Abra spokesperson said in a statement seen by Reuters:
“Abra is pleased to enter into a Term Sheet negotiated with a working group from the Money Transmitters Regulators Association regarding the Abra App that Abra previously offered in the U.S.”
Not Abra’s first time at the rodeo
Abra first attracted the suspicions of state securities regulators, which conducted a parallel investigation. That investigation led to the recovery of $13.6 million for Abra customers, according to a statement released by the Washington State Department of Financial Institutions.
Abra Trade stopped accepting assets and carrying out cryptocurrency transactions with United States customers on June 15, 2023. The CSBS Non-Depository Supervisory Committee informed states of the coordinated efforts being undertaken against Abra and requested that individual states not take enforcement actions. That request was not fully heeded.
Abra’s troubles did not begin with that action. The Securities and Exchange Commission fined Abra $300,000 for trading in synthetic assets in 2020. Texas regulators issued an emergency cease-and-desist order to Abra in June 2023, claiming the company was insolvent. Abra Earn and Abra Boost customers in Texas received their funds back after a settlement with the state of Texas in January.
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