The U.S. Securities and Exchange Commission (SEC) filed charges yesterday (August 26), against cryptocurrency investment firm Abra, also known as Plutus Lending LLC.
The charges against Abra are for allegedly conducting unregistered offers and sales of crypto asset securities while also functioning as an unregistered investment company.
Charges For Abra Come After The SEC Investigation Into Its ‘Abra Earn’ Program
We filed settled charges against Plutus Lending LLC, which does business as Abra, for failing to register the offers & sales of its retail crypto asset lending product, Abra Earn. The SEC also charged Abra w/ operating as an unregistered investment co. https://t.co/wbrpYFQyrZ pic.twitter.com/zG4Argki2H
— U.S. Securities and Exchange Commission (@SECGov) August 26, 2024
Abra has already settled the charges related to its Abra Earn service and agreed to pay an unspecified fine. The Earn service was dissolved in 2022 without admitting wrongdoing.
However, Abra continues to operate in the USA via Abra Capital Management, an SEC-registered investment advisor.
The complaint alleges that Abra began offering its Abra Earn product to U.S. investors in July 2020. This product allowed investors to deposit crypto assets with Abra in exchange for various variable interest rates.
At its peak, Abra Earn held approximately $600 million in assets, nearly $500 million of which came from U.S. investors.
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“As alleged, Abra sold nearly half a billion dollars of securities to U.S. investors without complying with registration laws designed to ensure that investors have sufficient, accurate information to make informed decisions before they invest,” said Stacy Bogert, Associate Director of the SEC’s Division of Enforcement.
The regulator claims that Abra marketed the product as a way for investors to earn interest “auto-magically” on their crypto assets. It is also alleged that Abra then used investors’ deposited assets at its discretion to generate income for itself and fund interest payments.
US Regulator Isn’t Easing Up On Uncomplying Crypto Firms
🚨 The SEC's relentless crackdown continues as their lawsuit against @krakenfx heads to trial.
Yet another reminder that centralized exchanges come with risks.
And yet another reminder of the SEC's constant attacks on crypto.
But as always, self custody is the best option. pic.twitter.com/h4M3NGWVMP
— Crypto Tips (@cryptotipsreal) August 26, 2024
The SEC’s action comes amid a broader regulatory crackdown on Abra, following a settlement with financial regulators from 25 U.S. states earlier this year over unlicensed operations. Abra committed to refunding up to $82.1 million to customers in those states.
The firm’s CEO, Bill Barhydt, has faced restrictions on participating in money transmitter or money services businesses for five years.
Monday’s charges against Abra continue to show the SEC’s firm approach to regulating the crypto industry. This latest case against Abra comes amid many high-profile lawsuits against other major exchanges such as Binance, Kraken, and Coinbase.
BONUS: Crypto Allstars (STARS) Nears $1 Million Raised During Presale
Crypto All-Stars ($STARS) continues to attract smart investment as it speeds toward a huge 7-figure milestone. The much-hyped project has raised $796,000 while rocketing through five price stages, smashing funding goals along the way.
This new meme coin introduces the industry’s first unified staking protocol, MemeVault, which allows top meme coins to be pooled together to earn rewards in STARS.
With the upcoming launch of MemeVault, the STARS token will also be imperative for multiplying the staking rewards that top meme coins can earn.
This revolutionary technology is a big reason why investors are flocking to the Crypto All-Stars project. The other reason being the insane APY on offer for staking STARS. As of right now, you can earn an eye-watering 1800% return for simply staking your bag.
STARS is currently priced at $0.0014078, but it’s set to rise to $0.0014191 in less than 48 hours.
EXPLORE: Next 1000x Crypto – 18 Coins That Could 1000x in 2024
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
