Abra to Refund $82M to Customers Over Unlicensed Mobile App
In a significant regulatory settlement, crypto trading platform Abra has agreed to refund up to $82.1 million to customers across 25 U.S. states. This agreement comes after an investigation revealed that Abra had been operating its mobile app for crypto transactions without the necessary state licenses.
Settlement Details
The settlement, announced on Wednesday, involves states such as Washington, Texas, Georgia, and Ohio. These states have decided to waive monetary penalties to ensure that customer repayments are prioritized. As part of the agreement, Abra’s CEO, Bill Barhydt, is barred from participating in money transmission or similar financial services within these states for the next five years.
Abra’s CEO, Bill Barhydt, attempted to downplay the severity of the settlement. On social media platform X (formerly Twitter), Barhydt stated that “no penalties are being paid as part of this agreement as no users were harmed in any way”. This response suggests that Barhydt is trying to minimize the impact of the settlement and maintain that Abra’s customers did not suffer any negative consequences from the company’s unlicensed operations.
Regulatory Investigation
The investigation, led by financial regulators from states including Washington, Arkansas, Georgia, and Texas, found that Abra had been offering crypto transactions through its mobile app without the required licenses. In response to these findings, Abra ceased allowing U.S. customers to buy, sell, or deposit crypto on its Abra Trade platform. The settlement now mandates that Abra return any remaining cryptocurrency holdings to affected customers in the involved states.
Charlie Clark, Chair of the Conference of State Bank Supervisors (CSBS), emphasized the importance of regulatory compliance, stating, “State financial regulators take their role to protect consumers and prevent unlicensed activity seriously. Companies that do not operate within the bounds of state laws will be held accountable.”
Expansion of Services
Despite the regulatory challenges, Abra has continued to expand its services. Earlier this year, the company launched “Abra Prime” and “Abra Private” platforms. Abra Private is designed for high-net-worth individuals and trusts, offering custom wealth management solutions. Abra Prime targets institutions such as hedge funds and venture capital firms, providing crypto investment services. Both platforms benefit from Abra’s recent approval by the U.S. Securities and Exchange Commission (SEC) to operate as an investment advisor.
This settlement underscores the growing scrutiny of crypto firms by state regulators and highlights the importance of obtaining proper licenses to operate legally within the U.S.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information
