Abra Settles With Texas Regulators; Allows Bulk Withdrawals
Crypto lending platform Abra is permitting its investors to withdraw up to $13 million in funds as part of its settlement with the Texas State Securities Board (SSB).
Texas SSB And Abra Reach Settlement
The Texas State Securities Bureau (SSB) has successfully settled its legal dispute with crypto lender Abra, reaching a resolution that permits approximately 12,000 investors to withdraw funds from the platform. The settlement arises from a lawsuit filed by the SSB against Abra, focusing on the lock-up of around $13.6 million worth of funds last year.
Under the terms of the settlement, Abra is obligated to facilitate the withdrawal of funds for investors. The affected investors had funds in interest-bearing accounts, including Abra Boost and Abra Earn. These accounts became inaccessible due to the legal battle between Abra and the SSB. The settlement now allows investors to claim their crypto assets within the next 30 days.
Legal Background: SSB’s Allegations
The SSB alleged that Abra offered investment products, specifically Earn and Boost, during a period of financial instability for the company. The regulatory body contended that these products qualified as securities under its jurisdiction and should have been registered before being offered to investors.
In a correspondence with Crypto Daily, Abra CEO Bill Barhydt insisted that “consumer funds were never frozen (ever.) The settlement simply memorializes that Abra will finish the process of returning funds.” However, the SSB has yet to issue a formal comment regarding the settlement, leaving the final regulatory perspective on this matter pending.
Withdrawal Process and Timelines
The successful resolution of this legal dispute is expected to instill confidence in the cryptocurrency platform’s commitment to protecting investors. As part of the settlement, Abra is required to notify clients with account balances exceeding $10 about the steps to take to withdraw their funds. A designated seven-day withdrawal window has been established to streamline the process. Any unclaimed funds will be converted into U.S. dollars and distributed to Texas investors through checks, following the terms outlined in the settlement.
Similar Settlements And Their Implications
There has been an uptick in the number of crypto companies that choose to settle with state and federal regulators. The latest example is the $8 million settlement between regulators in New York and Digital Currency Group subsidiary Genesis.
This trend favors the industry as it improves its perception among more institutional investors. Plus, the sector maturing rapidly also means higher regulatory oversight and scrutiny that bodes well for investors, encouraging more institutional participation and fostering mainstream adoption of cryptocurrencies.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Credit: Source link
