cryptonewsz.com
Abra has agreed to settle with the U.S. Securities and Exchange Commission over July 2020 allegations that the platform, owned by Plutus Lending, inappropriately pushed Abra Earn to customers and offered and sold unregistered crypto asset securities.
An official release by the SEC had also alleged that Abra had also operated as an ‘unregistered investment company’.
Plutus Lending (or Abra’s) yield-earning service, Abra Earn, allowed U.S. users to earn interest on their crypto, which was SEC’s prime complaint. Abra had reportedly used customer digital assets “to generate income for itself and to fund interest payments” and offer as well as sell securities that “did not qualify for an exemption from SEC registration.”
Abra Earn brought in nearly $600 million in crypto assets, out of which, $500 million came from U.S. customers, alleged SEC.
Abra accepted the settlement without admitting or denying the allegations. It has thus, consented to a prohibition from violating the U.S. securities-registration rules and the civil penalties.
In the past, Abra had already similarly settled with 25 states for working without licenses and conceded to return around $82 million to US users.
Associate Director of the SEC’s Division of Enforcement Stacy Bogert said in a statement, “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”.
“To compound the potential harm to investors, Abra allegedly sold its own securities while skirting applicable Investment Company Act provisions that provide a number of important protections to investors, including minimizing conflicts of interest,” added Bogert.