Abra Kadabra! And it’s gone.

Cryptocurrency investment company Abra has been issued an emergency cease and desist order by Texas securities regulators.

Authorities claim the cryptocurrency company, also known as Plutus Financial, and Chief Executive Officer Bill Barhydt have engaged in securities fraud. The enforcement order also states it offered investment products to unaccredited investors and that the company has been at least partially insolvent since March 31, 2023.

According to the Texas Securities State Board, on May 12, 2021, the Texas Enforcement Division issued a warning to Barhydt that Plutus Financial’s products appeared to constitute investment contracts or securities. The state set up a working group to further investigate the cryptocurrency company.

Abra has tried to argue against that characterization in its marketing.

“Earn users take no investment-like risks when they deposit digital assets into Interest accounts,” the company said last year. “Rather, Earn users are simply moving or placing their existing assets into their Interest Accounts with the possibility of receiving interest, but notably, no risk of an investment-type loss.”

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Author: Pedro Solimano

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