- The SEC accused Abra of securities law violations related to the Abra Earn program on the crypto platform.
- The regulator previously charged crypto firms Genesis and Gemini with securities violations tied to Gemini Earn.
The U.S. Securities and Exchange Commission has charged crypto platform Abra with offering and selling unregistered securities. The SEC complaint filed against Plutus Lending LLC alleges that Abra’s retail crypto lending product, Abra Earn, was marketed and made available to U.S. investors. Abra launched the Earn product in July 2020, and at its peak nearly $500 million of the product’s roughly $600 million in assets came from U.S.-based investors.
SEC alleges Abra operated as an unregistered investment company
According to the SEC, Abra promoted its Earn product as attractive to investors and used investor funds for various income-generating activities. That activity also helped fund interest payments to customers. The SEC therefore alleges that Abra offered the Earn program as a security and, by doing so, operated for a period of two years as an unregistered investment company in violation of the law. Following the SEC complaint, Abra halted its Earn program in the U.S. in June 2023.
“To resolve the Commission’s allegations without admitting or denying them, Abra agreed to a court order that prohibits it from violating the registration provisions of the Securities Act and the Investment Company Act and requires payment of civil penalties as determined by the court,” the SEC said in its press release.
Abra recently reached agreements with regulators in 25 U.S. states to operate in those jurisdictions under licenses. Notably, the allegations against Abra Earn mirror charges brought against Genesis and Gemini over the Gemini Earn program in January 2023. Genesis reached a settlement with the SEC earlier this year.
The SEC’s action against Abra comes just days after a U.S. judge ruled that the regulator’s case against Kraken may proceed. The SEC also has ongoing cases against Binance, Coinbase, and ConsenSys.