Abra, a crypto trading and lending platform, was sued by the SEC. It seems to be a trend that the SEC is suing crypto projects. The SEC sued Abra for conducting unregistered offers and sales of crypto assets through its Abra Earn services. The Securities Commission also alleged that Abra was operating as an unregistered investment firm.
The accusations about Abra
Launched in 2020, Abra Earn allowed investors to lend out their crypto assets and earn interest. Thanks to this service, the platform grew rapidly and managed approximately $600 million in assets. Most of these assets came from U.S. investors. According to the SEC, the company has not registered the service, making it illegal under federal securities laws.
The SEC in their press release shared details of the charges. It alleged that Abra sold about half a billion dollars in securities to U.S. investors without complying with regulatory requirements. Investors did not have enough information about the service to make informed decisions.
Response and settlement by Abra
Abra has already agreed to pay the undisclosed amount in fines and settle the case. It has also agreed to comply with securities laws going forward. A representative for Abra confirmed the settlement. They confirmed that they would close Abra Earn in 2022 and transfer all accrued interest and assets to customers’ Abra Trade accounts in 2023.
SEC’s Ongoing Scrutiny of Crypto
This is just one of many cases that the SEC has brought against various crypto projects. These projects may be different in the eyes of a crypto person, but to the SEC, they are just a few projects selling illegal securities. These tough actions by the SEC have led to anger in the crypto community worldwide, especially towards SEC Chairman Gary Gensler.
Looking ahead
While Abra settled the case with the SEC, it’s uncertain whether they won’t face another lawsuit for another matter brought by the securities firm. This case mirrors other similar cases like Gemini Earn, where companies failed to comply with registration requirements.
It is very difficult for crypto projects to find what regulations they need to comply with as there are no clear guidelines for digital assets. Unless clear rules are set for cryptocurrencies, we will see such cases increase every now and then.
