Cryptocurrency lender Abra, reportedly facing insolvency issues since March 2023, has agreed to a preliminary settlement with the Texas State Securities Board (TSSB). As part of the settlement, Abra will reimburse investments made by residents of Texas.
The TSSB finalized the agreement on January 22. Under the terms of the settlement, Abra will reduce its retail operations in the U.S. and will inform customers with account balances over $10 to withdraw their funds within a seven-day period. Funds that are not claimed will be converted into fiat currency and distributed to the remaining investors in Texas.
Abra has been promoting its services, Abra Earn and Abra Boost, promising users interest on their cryptocurrency deposits. These deposits were then loaned out by the company for profit. Despite still being advertised on their website with claims of up to 10% interest compounded daily and paid weekly, these services are at the center of regulatory scrutiny.
On June 15, 2023, the TSSB issued an urgent cease and desist order to Abra and its CEO Bill Barhydt, accusing them of securities fraud and deceptive practices related to the sale of investment products. The regulators also alleged that Abra was either insolvent or on the brink of insolvency as of March 31, 2023.
At the time of the TSSB's legal action, Abra managed $13.6 million in cryptocurrencies for over 12,000 U.S. investors, according to the details of the settlement. Of this amount, approximately $1.8 million belonged to around 1,600 investors in Texas.
Abra's X (previously known as Twitter) account has been inactive since June 2023. CEO Bill Barhydt confirmed the settlement, emphasizing that Abra "never halted withdrawals for U.S. clients" and "proactively ended" its Earn and Boost programs in 2023.
