Iowa Enters Settlement With Cryptocurrency Firm Abra

February 26, 2024

The Iowa Insurance Division announced it entered a settlement in principle with a group of affiliated companies commonly known as Abra. The settlement addresses Abra’s alleged offer and sale of interest-bearing cryptocurrency depository products referred to as Abra Boost and Abra Earn.

As part of the settlement, Abra is required to notify all Iowa consumers with open Abra accounts containing crypto assets on or before February 28, 2024, that Abra is winding down U.S. operations and to encourage them to move any remaining crypto assets from Abra’s platform.

Any assets owned by Iowa consumers that remain with Abra after March 6, 2024, will be converted to U.S. dollars and transferred to the Iowa Insurance Division Restitution Fund.

As part of the settlement in principle, Abra and Mr. Barhydt will enter a Consent Order with the Iowa Insurance Division requiring that they cease and desist from offering or selling unregistered securities in Iowa and ordering them to pay an administrative penalty of $461,610.14, which will be suspended if they comply with the process to return all assets owned by Iowa consumers.

The entry of this order is contingent upon Abra successfully fulfilling the requirements outlined above to ensure Iowa consumers have access to their assets or the converted value of their assets. Abra has until March 6, 2024, to complete its obligations.

The parties to the settlement include Plutus Financial Holdings Inc., Plutus Financial Inc., Plutus Lending LLC and Abra Boost LLC. These companies are controlled by William “Bill” Barhydt, who is also a party to the settlement. Together, they offered Abra Earn to all U.S. clients and Abra Boost to accredited U.S. clients. Investors in both programs earned interest by depositing digital assets with Abra and authorizing Abra to lend client assets to institutional borrowers.

Abra is presently winding down U.S. retail operations. Although clients have been able to withdraw their assets from Abra, cryptocurrencies valued at approximately $6,426.90 owned by approximately 39 residents of Iowa currently remain in its custody.

Source: Iowa Insurance Division

Topics Iowa

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