According to CoinDesk, cryptocurrency investment platform Abra and its CEO, William 'Bill' Barhydt, have reached a settlement with 25 state financial regulators over operating without the necessary money transmitting licenses. As part of the settlement, Abra has agreed to return up to $82.1 million in cryptocurrency to its U.S. customers in the settling states. The company will also cease accepting crypto allocations from all U.S. Abra Trade customers and halt all cryptocurrency transactions for these customers.
Barhydt has agreed not to be involved in any money transmitting or money services business in any of the 25 settling states, except as a passive investor, for a period of five years. The settlement includes states such as Washington, Arkansas, and Connecticut. This settlement is in addition to Abra's settlements with certain state securities regulators, including New Mexico and Texas, for selling unregistered securities.
The Conference of State Bank Supervisors (CSBS) announced the settlement, with CSBS Chair and Washington State Department of Financial Institutions Director Charlie Clark stating that companies not operating within state laws will be held accountable. The CSBS also revealed that state money services business regulators were alerted about Abra by state securities regulators last summer, leading to the settlement.
An Abra spokesperson stated that the company is pleased to enter into a term sheet negotiated with a working group from the Money Transmitters Regulators Association regarding the Abra App. The consent orders will settle all state matters related to the Abra App in the U.S. for the period from March 2021 to June 2023. Since June 2023, 99% of assets held by U.S. retail customers of Abra using the Abra App have already been returned, amounting to over $250 million. Abra continues to operate in the United States through Abra Capital Management, an SEC-registered investment advisor, that allows clients to invest in crypto, earn yield, stake and borrow against their crypto holdings. Additional states are allowed to join in the multi-state settlement.