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Financial regulators ensure $82 million in cryptocurrency assets are returned to consumers
On Wednesday, 25 state financial regulators ensured that $82 million in cryptocurrency assets would be returned to consumers after taking action against Abra Trading and others for operating a cryptocurrency company without the required license.
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In a multistate settlement announced by the Conference of State Banking Supervisors, Abra Trading, LLC; Plutus Financial, Inc.; Plutus Financial Participations, Inc.; Plutus Lending, LLC (collectively known as Abra), and William “Bill” Barhydt, Abra’s CEO and largest equity owner, agreed to stop accepting virtual asset allocations from their U.S. Abra trading account customers and to stop making, buying, selling, or trading cryptocurrencies available to Abra Trade’s U.S. customers. The settlement also requires Abra to refund all virtual assets remaining on its platform to Abra Trade’s U.S. customers in CSBS states. Regulators in Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington State investigated the company. They found that Abra was operating a mobile application to buy, sell, trade, and invest in cryptocurrency without proper state licenses.
“State financial regulators take their role of protecting consumers and preventing unauthorized activity seriously,” said Charlie Clark, president of CSBS and director of the Washington State Department of Financial Institutions. “Companies that fail to operate within the bounds of state law will be held accountable.”
CSBS said the states participating in the settlement agreed to waive the $250,000 penalty per jurisdiction to facilitate customer reimbursement. Officials said that once the terms of the settlement are met and the virtual assets are returned, consumers will be refunded up to $82.1 million.
The agreement also requires that Barhydt not participate in any money transmission or financial services business authorized or licensed in states participating in the agreement for the next five years.