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Crypto platform Abra has yet again run afoul of American regulators for offering access to unregistered financial instruments.
What’s the Scoop?
- SEC Settlement: Abra has settled with the Securities and Exchange Commission (SEC) over Abra Earn, a lending product which promised users “auto-magic” returns on their crypto assets. Deposits into the program were subsequently deployed by the platform to generate income and fund interest payments.
- Warning Shot: The settlement requires Abra to cease and desist from the activities in question and pay court-mandated civil penalties. It also sends a clear warning sign to groups offering crypto-based earn products to Americans without registering them as securities.
- Prior Settlements: Abra has already settled with 25 states for operating without a license and agreed to return more than $82M to U.S. customers. Additionally, the firm paid $150k to both the SEC and CFTC in 2020 to resolve an investigation into its unregistered swap products.
Bankless Take:
Compared to the often contentious regulatory enforcement actions levied against the crypto industry, Abra's case is more straightforward, involving a centralized entity that managed user funds to generate profit while failing to register the offering as a security with the SEC.
SEC complaint and settlement re Abra Earn.
— Bill Hughes : wchughes.eth 🦊 (@BillHughesDC) August 26, 2024
"AUTO-MAGICALLY". Are you serious?
"In or around July 2020, Abra began to offer and sell Abra Earn in the United States. Abra Earn allowed U.S. investors to tender their crypto assets to Abra in exchange for Abra’s promise to pay… pic.twitter.com/1j2r6eV4W1
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