New Jersey Regulators Sound the Alarm

New Jersey regulators have issued a stern warning to investors. They urge them to immediately withdraw any remaining crypto assets from their accounts on crypto lender Abra.

The California-based company is ceasing operations in the U.S. following a multistate investigation into its operations.

Abra's Licensing Troubles

The investigation revealed that Abra operated without the required state money services business (MSB) licensing. In response, New Jersey and other states took legal action against the company.

Abra and its CEO, William John 'Bill' Barhydt, have agreed to a settlement. This settlement involves refunding all virtual assets remaining on the platform.

Refunds and Conversions

The settlement also addresses allegations that Abra illegally sold interest-bearing accounts, specifically 'Abra Boost' and 'Abra Earn.' These accounts violated state securities laws.

'The agreement announced today requires Abra to return the funds it raised through the unlawful sale of unregistered securities in our state,' said Cari Fais, acting director at the Division of Consumer Affairs. 'These funds belong to New Jersey investors, and we want to ensure investors get them back.'

Under the agreement, any crypto held in New Jersey accounts will be converted to USD, and checks will be issued for amounts exceeding $10.

Smaller amounts will remain on the platform for withdrawal. Authorities said unclaimed funds will be transferred to the New Jersey Department of the Treasury's Unclaimed Property Administration. The officials instructed Abra to inform its New Jersey customers about withdrawing their assets.

$82M Settlement with 25 States

A group of state securities regulators, led by Texas, investigated Abra's interest-bearing accounts. In June 2023, several U.S. state financial authorities, including New Jersey, began legal action against Abra and its CEO. As a result, Abra started shutting down its U.S. operations.

While most customers have already withdrawn their funds, about $200,000 in cryptocurrency belonging to New Jersey investors remains on the platform.

In June, Abra and its CEO settled with 25 states. This settlement aimed to resolve allegations that it operated without proper licenses.

Abra agreed to return up to $82.1 million to customers in those states as part of the deal. The states waived potential penalties to prioritize customer refunds.