Abra, a crypto platform that provides trading, yield and debt services, is facing fraud charges from multiple state securities regulators in the US.
Regulators allege that Abra went bankrupt and secretly transferred investor funds to Binance, a global crypto exchange.
According to a June 15, 2023 filing by the Texas State Securities Board (TSSB), Abra and its CEO, William John "Bill" Barhydt, offer investments in Abra Earn and Abra Boost, two products that claim to deliver high returns from crypto deposits. and engaged in securities fraud in connection with its sale.
The filing also charges Abra with making misleading or deceptive statements about its financial situation, risk management and regulatory compliance.
PTSB alleges that Abra operates as an unregistered securities dealer and sells investments in Abra Earn to non-accredited and accredited investors in the United States. Abra Earn was a digital asset custodian that promised to pay up to 10% per annum return (APY) on crypto assets.
PTSD Claims Abra Transfers Customer Assets to Binance
The application also alleges that Abra secretly transferred client assets to Binance, a crypto exchange that is not licensed or registered in the US. According to the filing, as of February 2023, Abra had $118.6 million worth of assets on Binance.
Furthermore, the filing reveals that Abra will receive more than $90 million in bad debts to various crypto organizations such as Bitcoin companies Genesis, Three Arrows Capital and Babel Finance. These receivables are depreciated and illiquid; that is, Abra may not be able to buy them back or sell them for cash.
Abra has yet to respond to the allegations or the filing by PTSD.
*Not investment advice.