Abra, a crypto trading and lending platform, was sued by the SEC for conducting unregistered offers and sales of crypto asset securities through its Abra Earn services. The company was also accused of operating as an unregistered investment company.
The Allegations on Abra
Launched in 2020, Abra Earn allowed investors to lend their crypto assets and earn interest. Because of this service, the platform grew quickly, managing around $600 million in assets, most of which came from U.S. investors. According to the SEC, the firm did not register the service, making it illegal under federal securities law.
Response and Settlement by Abra
Abra agreed to pay an undisclosed amount in fines and settle the case. A representative from Abra confirmed the settlement and the shutdown of Abra Earn in 2022, with all accrued interest and assets transferred to customers' Abra Trade accounts in 2023.
SEC’s Ongoing Crackdown on Crypto
This case is one of many filed by the SEC against various crypto projects. These actions have led to frustration in the crypto community, particularly towards SEC chair Gary Gensler. Despite settling this case, Abra could face future lawsuits. This situation mirrors other cases like Gemini Earn, where companies failed to comply with registration requirements.
Until clear rules are established for digital assets, crypto projects will continue facing regulatory challenges. The lack of clear guidelines makes it difficult for crypto companies to ensure compliance.
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