By George Ward
Recently, Abra, and Bill Barhydt, the firm’s CEO, received an emergency cease and desist order from the Texas State Securities Board. The board stated that the company misled its customers and committed securities fraud through some of its products.
Crypto Fraud: Abra Receives Cease And Desist Order
Abra, a cryptocurrency trading platform, and its CEO, Bill Barhydt, have been hit with an emergency cease and desist order by the Texas State Securities Board. The board accused the company of committing securities fraud and deceiving its customers through some of its products, such as Abra Earn.
According to the regulator, Abra has been covertly transferring assets to Binance, a platform under the US SEC’s watch. The cautionary letter from the Texas regulator claimed that Abra deceived and committed fraud against the public by offering and selling unregistered securities through Abra Earn, its yield-earning product.
Although Abra removed this offering in October 2022, it continued to offer similar investments through a product called Abra Boost, which the regulator claims were another means of deceiving and scamming users. Earlier in March, a working body, which interviewed CEO Barhydt, estimated that the parties operating as Abra were either collectively insolvent or close to it.
It is noteworthy that Abra and Plutus Tech have already caught the attention of top financial regulators in the USA – the SEC and the CFTC. They were slapped with a fine of $300,000 for allegedly selling illegal security-based swaps to retail investors.
The Texas State Securities Board also claimed that the organization has been transferring funds discreetly to Binance. According to reports, Abra had assets worth more than $118 million at the crypto giant in February.
Coincidentally, the SEC is having legal issues with Binance.US, and Binance global CEO Changpeng Zhao, alleging that they provided trading services involving unlicensed securities such as BNB and BUSD. As a result of the Commission’s request for a freezing order, Binance.US delisted more than 100 trading pairs, including MANA/USDT, AAVE/USDT, BCH/BTC, DOT/BTC, XTZ/BTC, and MANA/BTC.
Abra: The Rising Star Of Crypto Trading Platforms
Abra, discovered in Silicon Valley in 2014, started gaining momentum in 2018 when it included support for 20 cryptocurrencies, such as Litecoin (LTC) and Bitcoin Cash (BCH). Its expansion continued in the subsequent years, reaching its peak during the bull market in 2021.
During this time, Abra secured a $55 million fundraiser backed by some notable figures in the finance industry, including American Express. In 2022, the trading platform announced its plans to establish two financial institutions – Abra Bank for American clients and Abra International for its global users.
The company stated that this move is critical to providing financial independence to people globally. Meanwhile, Abra was also affected by the prolonged crypto winter and had to let go of 5% of its staff in the summer, like many other digital asset organizations.