Plutus Lending LLC, DBA Abra, has been charged by the Securities and Exchange Commission (SEC) with offering and selling a retail crypto asset lending product. Abra has settled the charges without admitting or denying them.
Abra has consented to an injunction prohibiting it from violating the registration provisions of the Securities Act and the Investment Company Act. The firm will also pay a civil penalty, which will be determined by the courts.
The SEC alleges that Abra commenced Abra Earn in 2020. At its peak, Abra was said to have $600 million in assets, with $500 million coming from US-based investors.
The SEC’s complaint alleges that Abra Earn was “offered and sold as a security and that the offers and sales did not qualify for an exemption from SEC registration.” There were no claims of fraud or harm to investors.
The SEC adds that in June 2023, Abra began winding down the Abra Earn program and told its US-based investors to withdraw their crypto assets.
According to its website, Abra has discontinued the Abra app in the US and does not offer any money transmission products and services to US customers. Abra focuses on HNW individual and institutions.
Update: Abra has shared the following statement with CI on the settlement with the SEC:
“Plutus Lending LLC (“PLL”), a subsidiary of Abra, has agreed to settle an action brought by the SEC regarding Abra Earn, a service that was discontinued in 2022. Without admission of wrongdoing, PLL agrees to continue to comply with securities laws. No consumers were harmed at all by the settlement or wind down of Abra Earn. All assets for US Earn customers, including accrued interest, were transferred to their Abra Trade accounts in 2023. Abra continues to operate in the USA via Abra Capital Management, an SEC-registered investment advisor.”