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crypto.news 2025-01-16 15:46:53

SEC settles with Abra for $1.65m over unregistered crypto lending product

The SEC settles with crypto lender Plutus Lending LLC, operating as Abra The Securities and Exchange Commission has reached a settlement with crypto lender Plutus Lending LLC, which operates under the name Abra. The settlement resolves allegations that Abra violated federal securities laws by failing to register its retail crypto lending product, Abra Earn, and by operating as an unregistered investment company. As part of the agreement, Abra has consented to pay a $1.65 million civil penalty and comply with a permanent injunction imposed by the SEC . Although Abra settled the case without admitting or denying the allegations, the SEC emphasized that the enforcement action underscores its commitment to protecting investors in the volatile cryptocurrency market. You might also like: Coinbase rolls out Bitcoin-backed loans via Defi protocol Morpho Abra Earn The SEC’s charges stem from Abra’s offering of Abra Earn, a program that allowed U.S. investors to lend cryptocurrency in exchange for interest payments. According to the SEC, Abra marketed the program as a secure investment and, at its peak, managed over $600 million in assets—nearly $500 million of which came from U.S. investors. Additionally, the company held more than 40% of its assets in investment securities, in violation of the Investment Company Act. The SEC’s settlement with Abra comes amid heightened scrutiny of crypto lending platforms. In August 2024, the New Jersey Attorney General required Abra to return remaining cryptocurrency assets to investors and issue refunds as part of a multistate investigation. This case mirrors other SEC actions, including its February 2024 settlement with Genesis Global Capital over its Gemini Earn program. The SEC continues to target firms that fail to comply with registration and disclosure requirements, emphasizing the risks posed by unregistered securities in the crypto sector. You might also like: Trump open to adding XRP, Solana to U.S. crypto reserve: report

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