American Express-Backed Crypto Platform Slammed with Fraud Charges
• The Texas State Securities Board has filed an emergency cease and desist order against crypto trading platform Abra and its CEO Bill Barhydt, accusing the company of misleading customers and committing securities fraud.
• The watchdog also alleged that the firm had been secretly transferring assets to Binance, which was recently targeted by the US SEC.
• The working group interviewed CEO Barhydt at the end of March this year and estimated that “parties collectively operating as Abra were collectively insolvent or nearly insolvent.”
Texas Regulator Accuses Firm of Misleading Customers
The Texas State Securities Board has issued an emergency cease and desist order against crypto trading platform Abra and its Chief Executive Officer Bill Barhydt, alleging the company misled customers and committed securities fraud by offering some of its products, such as Abra Earn. The regulator also accused the firm of conducting secret transactions to Binance, which was recently targeted by the US SEC.
Working Group Interviews CEO
At the end of March this year, a working group interviewed CEO Barhydt and estimated that “parties collectively operating as Abra were collectively insolvent or nearly insolvent”. This raised further suspicion about how exactly Abra was doing business in terms of transparency and honesty with customers.
Abra Earn Removed but Boost Launched Soon After
Abra removed their yield-earning product Abra Earn in October 2022 but then launched a similar investment offering called Abra Boost shortly after – another attempt to mislead users according to the watchdog’s claims.
Exposure from Top Financial Regulators
This isn’t the first time that Abra has been targeted for its questionable business practices – it has already been exposed by some of America’s top financial regulators including the SEC and FinCEN (Financial Crimes Enforcement Network). It remains to be seen what will happen next as both entities continue their investigations into potentially fraudulent activities conducted by Abra.