Crypto exchange Abra has reached a settlement with the US Securities and Exchange Commission (SEC) for a yet-to-be determined amount for costs arising from alleged unregistered investment offerings.
The SEC specifically accused Abra’s parent company, Plutus Lending LLC, of failing to register its retail crypto asset lending product, Abra Earn. Abra settled the SEC’s charges without admitting or denying the allegations.
The exchange started offering Abra Earn in 2020, allowing users to stake their crypto to earn an interest rate. The product insured about $600 million in assets at its peak, according to the SEC, which claims Abra Earn was an unregistered security.
The regulator also accuses the exchange of operating as an unregistered investment company, alleging that the company held more than 40 percent of its total assets, excluding cash, in investment securities.
Abra has agreed to pay a civil penalty determined by the court. In June, the exchange was also arranged with a slew of state regulators in Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont and Washington state.
State regulators had launched a joint investigation into the company, accusing it of operating without proper licenses, according to a press release from the Conference of State Bank Supervisors (CSBS).
Regulators fined Abra $250,000 per jurisdiction and ordered the exchange to refund customers up to $82.1 million in crypto assets.
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