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Abra reaches settlement with SEC

GrafaGrafa2024/08/26 23:25
By:Mahathir Bayena

Abra, a crypto trading and lending platform, recently reached a settlement with the SEC after being sued for non-compliance.

The SEC's lawsuit against Abra is part of a broader pattern of the agency targeting crypto projects for alleged regulatory violations.

The SEC accused Abra of offering and selling unregistered crypto asset securities through its Abra Earn service.

Abra Earn, launched in 2020, allowed investors to lend their crypto assets and earn interest, rapidly growing to manage around $600 million in assets.

A significant portion of these assets came from U.S. investors, which brought Abra under the scrutiny of the SEC.

According to the SEC, Abra failed to register its services as required under federal securities laws, making its operations illegal.

The SEC’s press release stated that Abra sold nearly half a billion dollars worth of securities to U.S. investors without proper registration.

The lack of registration meant that investors did not have access to sufficient information to make informed investment decisions.

Abra has agreed to pay an undisclosed amount in fines as part of the settlement with the SEC.

The platform has also committed to future compliance with federal securities laws, according to a representative from Abra.

In addition to the settlement, Abra confirmed that it shut down its Abra Earn service in 2022.

All accrued interest and assets from Abra Earn were transferred to customers’ Abra Trade accounts in 2023.

The SEC’s actions against Abra are not isolated; the agency has pursued several other crypto projects for similar reasons.

Despite differences in how the crypto community views these projects, the SEC treats them as illegal securities offerings.

These enforcement actions have sparked significant anger within the global crypto community, particularly directed at SEC Chairperson Gary Gensler.

Although Abra has settled this case, there is uncertainty about whether the platform might face additional legal challenges from the SEC in the future.

This situation is reminiscent of the SEC’s case against Gemini Earn, another instance where a crypto company failed to comply with registration requirements.

The broader issue for crypto projects is the lack of clear regulatory guidelines, making it difficult for them to understand and adhere to legal requirements.

The uncertainty surrounding crypto regulations continues to pose significant challenges for the industry as a whole.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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