Texas regulator says Abra secretly moved funds to Binance, has been insolvent for months

The Texas State Securities Board filed an emergency cease and desist order on June 15 against the cryptocurrency lending firm Abra.

In its order, the regulator said, based on its investigations, it found that Abra and related parties committed fraud and made misleading statements.

The regulator said Abra made misleading statements by suggesting it was a “crypto bank” when in fact, Abra and its companies do not have a Texas bank charter, are not licensed to operate in Texas, and do not provide FDIC deposit insurance.

The securities board additionally said that Abra and associated parties “secretly” transferred holdings to Binance.com and held over $118 million on the platform as of February 2023. It said that Abra has failed to disclose the U.S. Securities and Exchange Commission’s and Commodity and Futures Trading Commission’s ongoing cases against Binance and related parties, thereby misleading customers.

The regulator described numerous other instances in which Abra made fraudulent and misleading statements in its filing today.

It also said it found that Abra’s various parties “were collectively insolvent or nearly insolvent” during its investigation on March 31, 2023.

Abra ordered to cease and desist

The filing orders Abra’s various companies and CEO to cease and desist from engaging in fraudulent offerings in Texas and from making misleading statements. It also seeks to have Abra and related parties pay a fine and return funds to customers.

The regulator does not specifically state how Abra should make changes to its offered services. Abra Earn was discontinued amidst the TSSB’s investigations in October 2022; Abra Boost remains available to accredited and institutional investors in the U.S.

The filing names Plutus Financial — which is doing business as Abra — as well as Abra Boost LLC and Abra CEO Bill Barhydt as the target of the order.

Abra and Barhydt have not responded to the filing publicly. The company did not respond to CryptoSlate’s request for comment at press time.

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