The Texas State Securities Board has issued an emergency cease-and-desist order against crypto lender Abra and its founder William Barhydt, alleging securities fraud and insolvency.
The Regulator Accused Abra and Barhydt of Misleading the Public
The Texas State Securities Board has issued an emergency cease-and-desist order against crypto lender Abra and its founder William Barhydt, alleging securities fraud and insolvency. The order claims that Abra has been insolvent since at least March 31, 2023.
The regulator accused Abra and Barhydt of misleading the public through investment offerings in Abra Earn and Abra Boost that contained materially misleading statements. The filing also stated that Abra Trade and Plutus Lending had been secretly transferring assets to Binance, and as of February 2023, they had assets valued at $118,581,732 on Binance.com. Abra has been in operation for nearly 10 years and had previously announced plans to launch a state-chartered bank in 2023.
Abra and its associated entities are still permitted to allow customers to withdraw funds while awaiting a scheduled hearing on the matter. The regulator revealed that Abra had substantial amounts of funds with various companies, including $30 million with Babel Finance, $8.8 million with Auros Tech Limited, $30 million with Genesis (owned by Digital Currency Group), and $10 million with Three Arrows Capital. However, these companies are undergoing liquidation or bankruptcy processes.
The filing highlighted an interview with Barhydt in which he did not contest the conclusion of Abra's insolvency. Despite this, Plutus Financial Holdings, Inc., or its affiliate or subsidiary, claimed on social media that Abra is not bankrupt and continues to operate normally, contradicting the regulatory findings.
