Bloomberg reported The Texas State Securities Board has filed an emergency cease and desist order against crypto trading platform Abra and its CEO Bill Barhydt, accusing them of securities fraud. The regulator alleges that Abra misled investors through the sale of its Abra Earn and Abra Boost crypto interest accounts. It further claims that the company secretly transferred assets to Binance Holdings Ltd., which was sued by the US Securities and Exchange Commission (SEC) last week for running an unregistered crypto exchange.
According to the filing, the Texas State Securities Board also stated that Abra was insolvent or nearly insolvent in March when the regulator interviewed CEO Bill Barhydt. Abra has faced regulatory challenges in the past and has paid multiple penalties. In 2021, the company raised $55 million from investors, including Amex Ventures, Arbor Ventures, and Kenetic Advisors. It had also partnered with American Express Co. with plans to launch a crypto credit card on the AmEx network. Abra reduced its workforce by 5% in the US and Asia last year.
The accusations against Abra come in the wake of increased scrutiny on the cryptocurrency industry by regulators worldwide. The SEC has been actively pursuing legal action against crypto firms for alleged violations of securities laws. The recent lawsuit against Binance and Coinbase reflects the agency’s efforts to crack down on unregistered crypto exchanges. These regulatory actions aim to protect investors and ensure compliance within the rapidly evolving crypto market.