Crypto investment platform Abra and its CEO William “Bill” Barhydt have reached a settlement with 25 state financial regulators for operating their mobile app without proper licenses. The Conference of State Bank Supervisors (CSBS) announced that Abra will return up to $82.1 million in crypto to customers in the settling states.
Under the terms of the agreement, Abra will cease accepting crypto allocations from U.S. customers and stop engaging in cryptocurrency activities with U.S. customers. Barhydt has agreed not to participate in money transmitting businesses within the 25 settling states for five years, except as a passive investor.
The settlement involved states like Washington, Arkansas, and Connecticut. It complements Abra’s previous settlements with state securities regulators in New Mexico and Texas for selling unregistered securities.
Abra’s spokesperson stated that the company is pleased to have negotiated a Term Sheet with a working group from the Money Transmitters Regulators Association regarding the Abra App. The corresponding consent orders will resolve all state matters related to the app in the U.S. from March 2021 to June 2023.
Since June 2023, over $250 million in assets held by U.S. retail customers of Abra have been returned, accounting for 99% of the total. Abra continues its operations in the U.S. through Abra Capital Management, an SEC-registered investment advisor, offering services such as crypto investments, yield earning, staking, and borrowing against crypto holdings.
CSBS mentioned that state money services business (MSB) regulators were alerted about Abra by state securities regulators last summer. State financial regulators worked in collaboration with securities regulators towards the settlement.
More states have the option to join the multi-state settlement, indicating a coordinated effort by regulators to ensure compliance within the crypto and financial sectors.