Golden Finance reported that the U.S. Securities and Exchange Commission (SEC) today filed a settlement charge against Plutus Lending LLC, which does business as Abra, for failing to register the offer and sale of its retail crypto asset lending product Abra Earn. The SEC also accused Abra of operating as an unregistered investment company. According to the SEC's complaint, Abra Earn allowed U.S. investors to bid their crypto assets to Abra in exchange for Abra's promise to pay a floating interest rate. At its peak, the Abra Earn program had about $600 million in assets, of which nearly $500 million came from U.S. investors. The complaint alleges that Abra marketed Abra Earn as a means for investors to "automatically" earn interest on crypto assets, using investors' crypto assets in various ways to generate income for itself and to fund interest payments. The complaint further alleges that Abra Earn was offered and sold as a security, and that these offers and sales did not qualify for SEC registration exemptions. To resolve the Commission’s charges, Abra, without admitting or denying the SEC’s allegations, agreed to an injunction prohibiting it from violating the registration provisions of the Securities Act and the Investment Company Act and requiring it to pay a civil penalty in an amount to be determined by the court.
