- Regulator points to fraud and hiding financial problems from investors
- The platform has $70 million in outstanding obligations from some major bankrupts
- And customer assets were timely moved to Binance by management
The Texas Securities Board (TSSB) issued an enforcement action order against crypto-lander Abra yesterday, June 15. In it, he accuses the company and its founder William Barhidt of fraud.
According to the agency, the firm lost its solvency in late March of this year. Despite this, company executives, including Barkhidt, continued to promote investments in Abra Earn and Abra Boost products.
“Alleged misconduct includes intentionally concealing financial losses, defaulting on loans and transferring funds to Binance,” the order states.
The notice also covers Plutus Lending. This company and Abra Trading were secretly transferring customer funds received as part of the promotion of the above products to Binance. As of February 2023, it contained about $118.5 million.
Abra also has outstanding obligations from Genesis, Babel Finance, 3AC totaling $70 million.. In late March, officials held talks with Barkhidt and presented their findings.
As indicated in the order, the Abra founder did not deny insolvency in any way. However, he still continued to promote the services of his platform. Interestingly, in September 2022, Abra announced plans to launch a bank in the U.S.. It was supposed to be the first regulated financial counterparty that could accept cryptocurrency deposits. But now, by all appearances, that’s not going to happen.