San Francisco, Saturday, August 31, 2024 – Crypto exchange Abra reached a settlement with the Securities and Exchange Commission (SEC) on Monday (August 26) regarding allegations that it failed to register the offers and sale of its lending product, Abra Earn, and operated as an unregistered investment company.
Abra launched Abra Earn in 2020, allowing U.S. investors to lend their cryptocurrency to the platform in exchange for interest.
At its peak, Abra Earn managed around $600 million in assets, primarily from U.S. investors. The program was discontinued in 2023.
The SEC alleged that Abra Earn was marketed and sold as a security without proper registration, violating federal securities laws.
According to the SEC’s Division of Enforcement, Abra sold nearly $500 million worth of securities to U.S. investors without providing the required information to ensure informed investment decisions.
Bogert also highlighted that Abra operated in violation of the Investment Company Act, which is designed to protect investors by minimizing conflicts of interest. The settlement reflects the SEC’s commitment to enforcing regulations based on economic realities, not just labels.
In June, Abra also agreed to repay $82 million to customers as part of a settlement with 25 states for operating without a license. Abra’s subsidiary, Plutus Lending LLC, confirmed that the settlement did not result in any harm to consumers.
