The U.S. Securities and Exchange Commission (SEC) announced on August 26 that it has settled charges against Plutus Lending LLC, known as Abra. The charges pertain to Abra’s failure to register its retail crypto lending product, Abra Earn, and for operating as an unregistered investment company. According to the SEC’s complaint, Abra began offering Abra Earn in July 2020, allowing U.S. investors to lend their crypto assets in exchange for interest payments.

At its peak, Abra Earn managed approximately $600 million in assets, with nearly $500 million coming from U.S. investors. On August 12, the New Jersey Attorney General advised state investors to withdraw funds from Abra as it wound down U.S. operations following a multistate investigation into the sale of unregistered securities. Under a settlement with New Jersey regulators, Abra was required to return all remaining crypto assets to investors, convert them to U.S. dollars, and issue refund checks for amounts over $10.

This settlement follows similar actions in Texas, where Abra faced allegations of hiding critical financial information.

Details of Abra’s Charges

The SEC alleges that Abra Earn was marketed as a secure investment without meeting the necessary registration requirements. Additionally, Abra held more than 40% of its assets in investment securities, violating the Investment Company Act. Although Abra began winding down the program in June 2023, the SEC’s charges emphasize the company’s failure to comply with regulations designed to protect investors.

Abra has agreed to settle the charges by consenting to an injunction and potential civil penalties, the amounts of which will be determined by the court. This news echoes the SEC’s recent legal battles with Gemini Earn. In February, Genesis Global Capital, LLC agreed to pay a $21 million penalty to settle SEC charges for the unregistered offer and sale of securities through its crypto lending program, Gemini Earn. Following Genesis’s bankruptcy filing in January 2023, investors were unable to withdraw their assets, highlighting the risks of non-compliance with federal securities laws in the volatile crypto market.

Stay informed and explore more news on Global Crypto News.

Tips for Crypto Investors

For those interested in cryptocurrencies, investing, and finance, here are some practical tips:

  • Research Thoroughly: Always research the crypto lending platforms and their compliance with regulations.
  • Diversify Investments: Diversify your portfolio to manage risks effectively.
  • Stay Updated: Keep yourself updated with the latest news and legal developments in the crypto market.
  • Consult Professionals: Seek advice from financial advisors experienced in cryptocurrency investments.

Follow these tips to make informed decisions and safeguard your investments in the ever-evolving world of cryptocurrencies. For more updates, stay tuned to Global Crypto News.

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