Another crypto-centric business found itself in hot water with government regulators in the United States last week as the trading platform Abra is now facing a fraud suit filed by the Texas State Securities Board.
As of Thursday, June 16th, the state regulator slapped an immediate cease and desist order on Abra and its chief executive Bill Barhydt.
According to documents filed by the Securities Board, Abra defrauded investors through its Abra Boost and Abra Earn accounts for digital assets. Earnings from these accounts are said to have been siphoned into Binance Holdings Ltd which is also undergoing litigation by the US Securities and Exchange Commission as it is allegedly operating a contraband crypto exchange platform.
The Securities Board also pointed out that Abra was in a state of near-insolvency as of March 2023, around the time its officials interviewed Barhydt regarding his company’s operations.
This is not the first time that Abra has taken flak from government regulators, let alone paid penalties. Back in 2021, the firm raised around $55 million from a number of investors that included Amex Ventures, Arbor Ventures, and Kenetic Ventures. Just last year, it also announced a team-up with credit card company American Express for the launch of a crypto-based credit card on the latter’s platform.
As of press time, neither Barhydt nor other officials from Abra have made statements to the media regarding the issue.