Crypto Lender Abra Receives Cease and Desist Order From Texas
- Texas Regulators crack down on Abra for unregistered swaps compliance concerns arise.
- In 2020, Abra faces federal actions, that charged respondent Plutus Financial and its subsidiary.
One more catastrophe occurred in the highly volatile cryptocurrency market. In a dramatic turn of events, crypto trading platform Abra and its CEO, William (Bill) Barhydt, are facing allegations of securities fraud as the Texas State Securities Board filed an emergency cease and desist order against the company. The regulator claims that Abra ”engaged in deceptive practices and misled investors. Through its Abra Earn and Abra Boost crypto interest accounts.”
According to the filing made on Thursday, the Texas State Securities Board asserts that Abra misrepresented information to investors regarding its offerings. Also, the board alleges that Abra failed to disclose vital details about the nature of its investment products. That leads to potential misinterpretations and false expectations among investors.
Texas Regulators Crack Down on Abra
The order issued by the Texas State Securities Board cast a dark cloud over the crypto market and sent shockwaves through the cryptocurrency community.
One of the main allegations put forth by the regulator is that “Abra secretly transferred assets to Binance Holdings,” which is currently embroiled in legal troubles. The US Securities and Exchange Commission (SEC) has filed a lawsuit against Binance for operating an unregistered cryptocurrency exchange. The alleged association between Abra and Binance raises concerns about the legitimacy and regulatory compliance of Abra’s operations.
Further, the Texas State Securities Board claims that Abra has been either insolvent or on the brink of insolvency since the end of March. Also, the board argues that Abra’s financial instability was not adequately disclosed to investors. Potentially exposing them to significant risks without their knowledge. Also, the legal proceedings made investors and industry stakeholders anxious.
However, in July 2020, the SEC and the CFTC took action against crypto lender Abra for engaging in unregistered swaps. Plutus Financial and its subsidiary agreed to both penalties (a total of $300,000) without admitting or denying the findings.
Also, they consented to a civil monetary penalty and committed to cease and desist. From further violations of the Commodity Exchange Act.
Read more: https://thenewscrypto.com/crypto-lender-abra-receives-cease-and-desist-order-from-texas/
Text source: TheNewsCrypto – Blockchain & Cryptocurrency News M
