Abra, along with CEO William “Bill” Barhydt, recently settled with 25 US state regulators for offering crypto trading services without the necessary licenses. The settlement, announced by the Conference of State Bank Supervisors (CSBS) on June 26, involved the regulators forgoing monetary penalties in exchange for $82 million in customer repayments.
Settlement Details
As part of the agreement, Abra agreed to cease accepting crypto allocations from US customers by June 15, 2023, and to refund all US customer balances. The settlement also imposed restrictions on Barhydt’s future involvement in money services businesses, although he is allowed to remain as a passive investor for five years. The initial consent order was published by Washington State, revealing that 706 users in the state still have a balance of $116,000.78 on the platform.
Several states, including Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, and Vermont, played a key role in reaching the settlement with Abra. A total of 25 states are involved, with other states expected to issue their consent orders in the coming weeks. The settlement marks the end of Abra’s US operations, as the company announced it would no longer accept US app users and discontinue various consumer services in the country.
Despite winding down its US operations, Abra’s institutional service, Abra Capital Management, remains operational in the US and is registered with the SEC. The company’s troubles with state regulators began in mid-2023 when the Texas State Securities Board issued an emergency cease and desist order against Abra for its interest-bearing products. This was followed by a settlement with New Mexico’s securities regulator in April.
Implications of the Settlement
The settlement with US state regulators has significant implications for Abra and its CEO, as they are required to repay millions to customers and cease operations in the country. The restrictions placed on Barhydt’s future involvement in money services businesses also limit his ability to engage in similar ventures in the future. The settlement serves as a warning to other crypto trading platforms to ensure they comply with regulatory requirements to avoid facing similar consequences.
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