According to an emergency cease-and-desist order from the Texas State Securities Board, the cryptocurrency firm Abra is “insolvent or nearly insolvent.” The filing alleges that a group of state securities regulators has been investigating Abra, and the working group interviewed William Barhydt, the company’s founder, in March 2023.
Texas State Regulators Issue Cease-and-Desist Order, Citing Insolvency Claims Against Crypto Firm Abra
The Texas State Securities Board (TSSB) has issued an emergency cease-and-desist order against the company Abra and its network of subsidiaries. The notice alleges that Abra and its affiliate companies are “collectively insolvent or nearly insolvent.” The order also named Plutus Financial, Plutus Lending, Abra Boost, and the firm’s founder, William John “Bill” Barhydt.
The TSSB allegations suggest that in 2022, Barhydt restructured the firm into multiple entities and “sold investments in Abra Earn, a digital asset depository account, to unaccredited and accredited investors in the United States.” The TSSB order additionally alleges that a “working group of state securities regulators have been investigating Abra.”
During the investigation conducted on or around March 31, 2023, Barhydt was interviewed by the working group. Allegedly, the interview revealed that all the “parties collectively operating as Abra” were insolvent or close to insolvency. The regulator insists that Plutus Financial, Plutus Lending, and Barhydt violated state securities laws through Abra Earn.
The order further states that Barhydt and the parties “engaged in fraud” and made “statements that were materially misleading or otherwise likely to deceive the public.” Additionally, the order declares that the Abra Boost products “are securities,” and the state regulators demand an immediate cease and desist of all operations by the firm in Texas. The order is signed by Travis J. Iles, the Texas state securities commissioner.
“The Texas State Securities Board is encouraging Abra investors to immediately access and review the enforcement actions. The enforcement actions include allegations that relate to the disclosure of information, including the disclosure of financial information. Abra has not yet had the opportunity to challenge the allegations,” a press release from the TSSB website says.
Abra’s social media platforms have not addressed the matter at the time of writing, and Barhydt’s last tweet was on June 14, but it is now deleted. Prior to that, according to records, the Abra founder tweeted about artificial intelligence (AI) on June 12, 2023.
What are your thoughts on the regulatory crackdown faced by Abra and the allegations of insolvency? Share your thoughts and opinions about this subject in the comments section below.
via Jamie Redman
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