Abra to Reimburse $13.6 Million to Clients in Texas Regulator Settlement

The Texas State Securities Board announced a settlement in principle with the crypto platform Abra to resolve allegations of misleading investors in the sale of its Abra Earn and Abra Boost products.

The regulator took enforcement action against the company in June 2023. The Board’s claims included deliberate concealment of financial information, failure to meet loan obligations, and secret transfers of funds to Binance. According to the agency, Abra was insolvent as of March 31, yet continued to attract client funds.

The agreement reached will allow the platform to convert frozen crypto assets worth $13.6 million into fiat to return funds to over 12,000 American investors. Of this, $1.8 million is owed to 1,600 Texas residents.

Abra has committed to notifying all clients with a balance over $10 and providing them with a seven-day window to withdraw their assets.

The settlement also involves the firm’s CEO Bill Barhydt and three other companies he controls that participated in the sale of investment products.

Abra has 30 days to fulfill its obligations under the agreement.

The Board noted that the company and its head cooperated with authorities during the investigation.

Abra is one of the veterans of the Bitcoin industry. The company has been operating since 2014, initially offering a money transfer app between the Philippines and the United States.

In the fall of 2015, Abra received $12 million in funding, including from American Express Ventures.

Subsequently, its geographical reach was expanded: in 2016, the company entered the US market and later added the option to invest using Bitcoin and other cryptocurrencies in traditional financial instruments.

In May 2020, the Stellar Development Foundation invested $5 million in Abra.

In September 2021, the platform closed a Series C funding round of $55 million with participation from Blockchain Capital, Kingsway Capital, Stellar Development Foundation, and others.

In July 2022, Abra reduced its workforce by approximately 5%.