The collective entities known as “Abra” and CEO William “Bill” Barhydt have reached a settlement with 25 U.S. state regulators for offering crypto trading services without obtaining proper licenses, according to the 26 Conference of State Bank Supervisors (CSBS) press release June.
As part of the settlement, the 25 state regulators agreed to waive monetary penalties of $250,000 per jurisdiction to allow for $82 million in refunds to customers.
Additionally, Abra agreed to stop accepting crypto allocations from US customers and to refund US customer balances starting June 15, 2023.
The settlement also prohibits Barhydt from participating in money services businesses that are licensed or required to obtain a license in the states that participated in the settlement. However, he may remain involved as a passive investor for five years. Barhydt is Abra’s largest stockholder.
Washington leads with consent order
Washington was the first state to publish its consent order on June 26. The order indicates that 706 users in the state still have a balance of $116,000.78 on the platform.
Washington noted that customers have received $13.6 million to date.
The CSBS highlighted the role of Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas and Vermont in the settlement and named 18 others, including Washington, who participated in the settlement.
According to the press release, the other states will issue their consent orders in the coming weeks or months and more states may join the settlement as the case concludes.
Abra wind down
Abra began winding down its U.S. operations in June 2023, stating that it would stop accepting U.S. app users and shut down several U.S. consumer services.
The company said its operations outside the US were unaffected. Recent statements to Reuters indicate that the company’s institutional service, Abra Capital Management, is still active in the US and registered with the SEC.
Abra’s U.S. wind-down coincided with Treasury regulators alerting state money service company (MSB) regulators to Abra’s activities in June 2023, prompting a parallel push for settlements.
The Texas State Securities Board filed an emergency injunction against Abra regarding its interest-bearing products in mid-2023, culminating in a settlement in January. New Mexico’s securities regulator also reached a settlement with Abra in April.