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Abra, a crypto trading and lending platform got sued by the SEC. It seems like a trend for the SEC to sue crypto projects. The SEC sued Abra for conducting unregistered offers and sales of crypto asset securities through its Abra Earn services. The Securities Commission also alleged Abra to have operated 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 these assets came from U.S. investors. According to the SEC, the firm did not register the service making it illegal under federal securities law.
The SEC in their press release shared details about the charges. It claimed that Abra sold around half a billion dollars of securities to U.S. investors without complying with registration laws. The investors did not have sufficient information about the service to make informed decisions.
Response and Settlement by Abra
Abra has already agreed to pay the undisclosed amount in fines and settle the case. It has also agreed to comply with the securities law moving forward. A representative from Abra has confirmed the settlement. They confirmed shutting down Abra Earn in 2022 and transferring all accrued interest and assets to customers’ Abra Trade accounts in 2023.
SEC’s Ongoing Crackdown on Crypto
This is just one of the many cases the SEC has filed over various crypto projects. These projects may be different in the eyes of a crypto person but for the SEC, they are just some projects selling illegal securities. These harsh actions by the SEC have led to anger in the crypto community worldwide, especially towards the SEC chairperson Gary Gensler.
Looking Ahead
Even though Abra has settled the case with the SEC, it is unsure they will not get another file suit for some other case by the securities firm. This case mirrors other similar cases like Gemini Earn where companies failed to comply with registration requirements.
It is very hard for the crypto projects to find what regulations they have to comply with as there are no clear guidelines for the digital assets. Unless there are some clear rules set for the crypto currencies, we will continue to see such cases rise every now and then.