The Texas State Securities Board filed an emergency cease and desist order against crypto trading platform Abra and its Chief Executive Officer Bill Barhydt. The watchdog claimed that the company misled its customers and committed securities fraud by offering some of its products, such as Abra Earn.
The regulator added that the firm has been “secretly transferring assets” to Binance, noting that the US SEC has recently targeted the world’s biggest crypto exchange.
Insolvent Since March?
The Texas regulator maintained in its lengthy cautionary letter that Abra deceived the public and engaged in fraud via the offer and sale of unregistered securities. The company supposedly violated existing laws using its yield-earning product Abra Earn.
While it removed that offering in October 2022, the platform later started selling investments through a similar product called Abra Boost. According to the watchdog, the shift was another way to mislead and scam users.
A working group interviewed CEO Barhydt at the end of March this year, estimating that “parties collectively operating as Abra were collectively insolvent or nearly insolvent.”
It is worth mentioning that the organization has already been a target for some of the top financial regulators in the USA – the SEC and the CFTC. The agencies imposed a fine of $300,000 on Abra and Plutus Tech for the alleged sale of illegal “security-based swaps to retail investors.”
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Author: Dimitar Dzhondzhorov
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