Abra Agrees With SEC Over Unregistered Sale of Crypto Asset Charges

After the United States Securities and Exchange Commission (SEC) alleged that Abra Earn constitutes the sale of securities without regulatory approval, Plutus Lending LLC, operating as Abra, the company behind Abra Earn, has agreed to settle with the SEC.

In June 2020, the SEC alleged that the tech company sold unregistered securities to its customers, who are primarily based in the U.S., and also operated as an unregistered entity.

According to the SEC, Abra Earn allowed people to earn crypto assets. The SEC claimed that the company used customers’ digital assets to generate profit for itself without proper registration while also selling securities that didn’t qualify for an exemption as cryptocurrency.

Without disputing the allegations, Abra admitted to violating regulatory procedures and has agreed to pay penalties, which will be determined by the court, the SEC stated.

The SEC reported that Abra sold $600 million in crypto to customers globally, with $500 million sold to U.S. customers alone. These sales were made “without complying with registration laws” designed to protect customers from unregulated securities.

In a separate development, the Texas Securities and Exchange Commission has also charged Abra for selling securities without regulatory approval. This could result in additional fines if the company is found guilty as alleged.

Various cryptocurrency firms are being scrutinized by regulators for noncompliance. Recently, Ripple was ordered to pay a fraction of its earnings from the sale of XRP assets after a U.S. court dismissed part of the allegations against Ripple Labs that would have classified XRP sales by the company as securities.

Also, Binance is facing charges in several countries, including Nigeria, where the exchange is accused of aiding terrorism by providing a platform for terrorists to sell cryptocurrency and secure financial support globally.

In another dimension, the arrest of Telegram’s CEO, which led to a 16% drop in Toncoin yesterday, is another example of the ongoing crackdown on cryptocurrency.