Abra Settles with SEC Over 'Auto-Magic' Crypto Earn Program

Crypto platform Abra has yet again run afoul of American regulators for offering access to unregistered financial instruments.

What’s the Scoop?

• SEC Settlement: Abra has settled with the Securities and Exchange Commission (SEC) over Abra Earn, a lending product which promised users “auto-magic” returns on their crypto assets. Deposits into the program were subsequently deployed by the platform to generate income and fund interest payments.
• Warning Shot: The settlement requires Abra to cease and desist from the activities in question and pay court-mandated civil penalties. It also sends a clear warning sign to groups offering crypto-based earn products to Americans without registering them as securities.
• Prior Settlements: Abra has already settled with 25 states for operating without a license and agreed to return more than $82M to U.S. customers. Additionally, the firm paid $150k to both the SEC and CFTC in 2020 to resolve an investigation into its unregistered swap products.

Bankless Take:

Compared to the often contentious regulatory enforcement actions levied against the crypto industry, Abra's case is more straightforward, involving a centralized entity that managed user funds to generate profit while failing to register the offering as a security with the SEC.