Abra reaches 21 million settlement with 25 US states for cryptocurrency trading platform

CoinDesk reported:
Abra reaches settlement with U.S. state regulators over unlicensed operations. Gemini’s Earn program to settle with users and guarantee $1.1 billion amid regulatory challenges.
In a recent turn of events, Abra has reached a settlement with financial regulators from 25 U.S. states over charges of operating without proper licenses.
Notably, the action is directed not only at Abra, but also its subsidiaries and CEO William Barhydt.
Settlement terms
The Conference of State Bank Supervisors (CSBS) noted in a press release that,
“Once the remaining virtual assets are returned as part of the settlement terms, up to $82.1 million will be refunded to consumers.”
This highlights the increase in illicit activities and the efforts made by U.S. jurisdictions in protecting consumers.
CSBS Chairman and Washington Department of Financial Institutions Director Charlie Clark commended the efforts of U.S. jurisdictions in a press release,
“State financial regulators are diligent in protecting consumers and preventing unlicensed activity. Companies operating outside the scope of state law will be held accountable.”
Investigation details
In terms of background, the investigation was conducted by state financial regulators from several states, including Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington.
During the investigation, regulators found that Abra was offering cryptocurrency-related services through its mobile application without the necessary licenses.
It is worth noting that as early as June 15, 2023, Abra agreed to stop accepting virtual asset deposits from U.S. customers and to cease providing cryptocurrency buying and trading services to U.S. customers.
Additionally, Abra was also required to return any remaining virtual assets held by U.S. customers in participating states.
A spokesperson for Abra stated in a release,
“Abra is pleased to have negotiated a list of terms with a working group of the Conference of State Bank Supervisors regarding the Abra application previously offered in the U.S.”
Gemini also exploited the same loophole
Needless to say, this is not the first time such an incident has occurred.
In fact, the New York State Department of Financial Services (DFS) recently announced that Gemini, in collaboration with Genesis and other creditors, was operating outside of DFS regulation.
Subsequently, Genesis reached a settlement with DFS, in which the Earn program users were guaranteed “100% return of digital asset in-kind,” totaling approximately $1.1 billion.
As such, with the widespread adoption of digital asset regulation in the U.S., these cases underscore the importance of compliance with regulatory frameworks to maintain trust and stability in the financial ecosystem.