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Abra Suspends Retail Services in the U.S. Amid Fraud Allegations

Abra CEO Bill Barhydt in Manila Philippines (1)

File Photo from BitPinas. Abra CEO Bill Barhydt at an event in Manila in 2019.

Crypto lender Abra is ending all retail services in the United States as of June 15, 2023.

Fast Facts:

  • The company’s announcement impacts Abra Trade, Abra Earn, and Abra Boost, all of which will stop accepting new customers and commence winding down operations.
  • In an email obtained by BitPinas, Abra said the decision comes in the wake of discussions with state and federal regulators, and comes in response to a challenging operating environment and potential legal threats directed at Abra’s U.S. retail business.

However, in multiple articles in crypto publications, it was revealed that regulators in the United States have made serious claims that Abra has been insolvent since at least March 31, 2023.

  • An emergency cease-and-desist order issued by the Texas State Securities Board accuses Abra and its founder, William Barhydt, of deceiving the public and engaging in securities fraud.
  • The order further alleges that Abra and Plutus Lending have transferred assets to Binance, a company recently charged by the U.S. Securities and Exchange Commission for securities laws violations. (Read more: US SEC Charges Binance, CZ, for Operating an Illegal Crypto Exchange)
  • As of February 2023, the two entities reportedly held assets valued at $118 million on Binance.

Abra’s parent company, Plutus Financial Holdings, has publicly refuted claims of bankruptcy and operational issues, according to Coindesk.

Abra to retain institutional and international markets

  • Abra stated it will continue offering institutional and prime services across all jurisdictions, the United States included.
  • Moreover, the company’s retail services will continue to be available to customers outside the United States.
  • Abra also indicated its intent to focus on expanding its institutional and international operations, which includes the establishment of subsidiaries in various international jurisdictions.

Abra’s Presence in the Philippines

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As per publicly available information on LinkedIn, Abra employs at least 11 personnel in the Philippines:

Photo for the Article - Abra Suspends Retail Services in the U.S. Amid Fraud Allegations

As of November 2019, Abra began supporting over 200 cryptocurrencies.

Starting from September 2019, users in the Philippines could add funds to their Abra wallets via 7-Eleven stores and UnionBank.

While the company at one point introduced fractionalized tokenized stocks to its services, this feature was eventually removed.

When asked why the company does not have virtual currency exchange license in the Philippines, yet was operating, this is what its support team mentioned in 2018:

Abra is not a financial services company in the Philippines. We provide a software interface into other third-party services and as such we are not regulated by the BSP. We will continue to monitor changes to laws to make sure we’re compliant with the latest regulations.

This article is published on BitPinas: Abra Suspends Retail Services in the U.S. Following Fraud Allegations from Regulators