The Texas State Securities Board has taken enforcement actions against crypto lending firm Abra and its CEO, Bill Barhydt, accusing them of securities fraud and deceptive practices. The board alleges that Abra solicited and distributed investment opportunities related to Abra Earn and Abra Boost to both accredited and unaccredited investors. Abra Earn was allegedly offered and sold without proper registration, and Abra Boost was exclusively offered to accredited investors.
Abra Faces Claims of Securities Fraud and Deception
Abra, founded in 2014, allows retail and institutional investors to trade, lend, and borrow crypto assets. The Texas regulator claims that Abra deliberately concealed financial information related to relevant parties’ capitalization, defaults on loans, and asset transfers to Binance. These actions are said to have misled investors in Abra Earn within the state.
As of May 17, Abra reportedly managed $116.79 million of assets for investors participating in Abra Earn and Abra Boost across the United States.
Insolvency Allegations
Along with securities fraud accusations, the regulator also alleges that Abra was insolvent or nearing insolvency as of March 31. The enforcement action document reveals the company’s exposure to failed crypto exchange FTX, as well as other entities like Genesis, 3AC, Auros, and Babel Finance. The regulator further accuses Abra of covertly transferring assets to Binance, raising concerns about transparency and integrity.
This is not the first time Abra has faced regulatory scrutiny. In July 2020, the Securities and Exchange Commission and Commodity Futures Trading Commission imposed a joint fine of $300,000 on Abra for offering “security-based swaps” to retail investors without proper registration.
