On Wednesday, 25 state financial regulators ensured that $82 million in cryptocurrency assets would be returned to consumers after taking action against Abra Trading and others for operating a cryptocurrency company without the required licensing.
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In a multistate settlement announced by the Conference of State Bank Supervisors, Abra Trading, LLC; Plutus Financial, Inc.; Plutus Financial Holdings, Inc.; Plutus Lending, LLC (collectively known as Abra) and William “Bill” Barhydt, Abra’s CEO and largest equity owner, agreed to stop accepting virtual asset allocations from their U.S. Abra trade Account customers and to stop making, buying, selling or trading cryptocurrencies available to U.S. Abra Trade customers. The settlement also requires that Abra refund all of its remaining virtual assets on its platform for U.S. Abra Trade customers in CSBS states. Regulators in Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington State investigated the company. They found that Abra had been operating a mobile application for buying, selling, trading, and investing in cryptocurrency without the proper state licenses.
“State financial regulators take their role to protect consumers and prevent unlicensed activity seriously,” CSBS Chair and Washington State Department of Financial Institutions Director Charlie Clark. “Companies that do not operate within the bounds of state laws will be held accountable.”
CSBS said the states participating in the settlement agreed to forgo the $250,000 penalty per jurisdiction to facilitate customer repayment. Officials said that once the settlement terms are reached and the virtual assets are returned, up to $82.1 million will be paid back to consumers.
The settlement also requires that Barhydt will not participate in any money transmitting business or money services business licensed or required to be licensed in the states participating in the settlement for the next five years.