• Wed. Jun 19th, 2024

Abra to Allow Customer Withdrawals After Settlements With Texan Authorities

Walter Swift

ByWalter Swift

Jan 25, 2024
Abra to Allow Customer Withdrawals After Settlements With Texan Authorities

A January 22, 2024, press statement from the Texas State Securities Board announces an in-principle settlement deal between Abra and the securities regulator that will allow all customers in Texas to withdraw their assets in cash or kind from Abra Boost and Abra Earn within 30 days. The in-principle agreement is part of a wide-ranging set of actions to expedite the closure and cessation of activities in the United States while ensuring customers in Texas can claim their funds.

According to the settlement, Abra has agreed to notify all customers with balances exceeding $10 of the procedure, offering them an opportunity to withdraw their assets within a week. The company will also have to convert all unclaimed assets to fiat currency and send them to their owners as part of the settlement.


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Abra, the firm behind Abra Boost and Abra Earn, has admitted its wrongdoing as part of the settlement, agreeing to comply with relevant directives by the Texas State Securities Board to ease its possible insolvency and eventual closure.

What Does Abra Do?

Abra is a group of affiliated companies offering cryptocurrency deposit and lending services using two affiliated products: Abra Boost and Abra Earn. The official website describes it as the first global investment app (in the world) designed for the future of finance.

Abra claims to empower users to invest in hundreds of crypto tokens with the freedom to buy, sell, hold, exchange, and send them anywhere. However, those freedoms have eluded Texan investors after the company became insolvent, unwilling, and unable to pay its piling debts.

On June 15, 2023, the Texas State Securities Board announced Abra Earn and Abra Boost, two companies associated with Abra, were insolvent or nearly insolvent by March 31, 2023, immediately ordering Abra to review the accusations and submit its financial statements for vetting.


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The press release also included a cease and desist letter and allegations that Abra committed securities fraud and concealed essential information from investors. Texas State Securities Board also declared Abra insolvent in the statement, setting the ball rolling for the investigation that formed the backdrop for this settlement.

What Are the Settlement Terms?

The Texas State Securities Board arrived at a settlement with Abra to return all funds within 30 days of agreeing to the settlement in what could be the most optimal outcome for investors within and beyond Texas. 

Among many other terms, the settlement requires Abra to convert all investor funds to fiat based on the forced sale value. Then, the company must make the funds available to every investor by mailing checks, sending cashier checks, or any other secure bank instrument. Abra can enable funds through a third-party digital solution agreed upon by the settling parties.

Before then, the company must notify all users with balances exceeding $10 of plans to return their funds through email and text messages. The settlement also requires the company to make the funds available for withdrawal through the Abra app for at least seven days.

Abra must also record every step of the compliance process and furnish the Texas State Securities Board with the same, working hand-in-hand with the agency to ensure the entire procedure is seamless.

In return, the Texas State Securities Board will agree to remove its Cease and Desist Order and its earlier press release declaring Abra and its subsidiaries insolvent. If Abra declares bankruptcy or fails to repay investors, the Texas State Securities Board can impose a fine on the firm, effectively ending any prospective operations within Texas.

What to Expect

Texans using any of Abra’s apps to trade cryptocurrencies should start expecting email and text messages from the company informing them of the company’s plans to refund all customer funds.

Abra will likely unlock customer funds as soon as possible, while making provisions to ensure inactive users get their due. Since it’s a settlement, there should be no appeal or take backs on either end, so users can reliably expect to get paid as soon as Abra opens up its app for withdrawals for the first 7-day window.

With the settlement not precluding possible future investigations by securities regulators, Abra’s row with the Texas State Securities Board may not be the end, as other issues are still on the table for resolution.

 


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Walter Swift

Walter Swift

Walter Swift is an adept crypto writer, known for his deep insights into the decentralized world. His pieces artfully break down complex blockchain topics, making them accessible to a broad audience. With a passion for emerging technologies, Walter's articles are a beacon for crypto enthusiasts and novices alike.

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