Abra and its CEO, William “Bill” Barhydt, recently reached a settlement with 25 US state regulators for offering crypto trading services without appropriate licenses. This settlement involves a significant amount of money and several conditions that Abra must abide by in order to rectify the situation.
One of the key aspects of the settlement is the agreement to forgo monetary penalties of $250,000 per jurisdiction and facilitate $82 million in customer repayments. This highlights the seriousness of the violation and the importance of compensating affected customers. Additionally, Abra has agreed to cease accepting crypto allocations from US customers and refund their balances. Barhydt has also been barred from participating in certain money services businesses for a period of time.
The involvement of states such as Washington, Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, and Vermont in the settlement indicates the widespread impact of Abra’s actions. It is notable that Washington was the first state to publish its consent order, revealing the extent of the problem and the amount of money involved. Other states are expected to issue their consent orders in the coming weeks or months, suggesting that the fallout from this settlement will continue to unfold.
As a result of the settlement, Abra began to wind down its US operations, signaling a significant shift in its business strategy. While its operations outside the US remain unaffected, the company has made changes to its US services and customer base. The fact that Abra’s institutional service, Abra Capital Management, continues to operate in the US and is registered with the SEC raises questions about the company’s future direction and compliance with regulations.
The actions taken by state securities regulators, such as the emergency cease and desist order filed by the Texas State Securities Board, indicate a heightened level of scrutiny and enforcement in the crypto trading space. This settlement with Abra is just one example of the regulatory challenges that companies in this industry face. As more states join the settlement and issue their own consent orders, the impact on Abra and similar companies will become clearer. It remains to be seen how this settlement will shape the future of Abra and the wider crypto trading industry.
The Abra settlement serves as a reminder of the importance of regulatory compliance and the consequences of failing to obtain proper licenses. This case highlights the need for companies operating in the crypto space to be diligent in their dealings and transparent in their operations. The fallout from this settlement will continue to unfold as more states take action, and it will be interesting to see how Abra navigates this challenging situation in the months and years ahead.
