Crypto Lender Abra Has Been Insolvent for Months, State Regulators Say

Crypto lender Abra has been insolvent since at least March 31, 2023, state securities regulators alleged on Thursday.

In an emergency cease-and-desist order, the Texas State Securities Board alleged that Abra (otherwise known as Plutus Financial), Abra Boost, Plutus Lending and Abra founder William Barhydt misled the public, committed securities fraud and the company has been insolvent for months.

Abra offered investments in Abra Earn and Abra Boost, the regulator alleged, but these investment offerings contained statements that were misleading.

Abra "made offers of investments in Abra Earn in Texas containing statements that were materially misleading or otherwise likely to deceive the public," the filing said, going on to add similar statements about other Abra products.

"Abra Trade and Respondent Plutus Lending have been secretly transferring assets to Binance Holdings Limited DBA Binance AKA Binance.com. As of February 2023, Abra Trade and Respondent Plutus Lending had assets valued at $118,581,732 at Binance.com," the filing said, which noted that the U.S. Securities and Exchange Commission sued Binance this month.

Until then, Abra and its various entities are still allowed to let customers withdraw funds, the filing said.

According to the regulator, Abra has a hair under $30 million on Babel Finance, $30 million on Genesis and $10 million on Three Arrows Capital. All of these companies are in various liquidation or bankruptcy processes. It also has some $8.8 million on Auros Tech Limited, which entered liquidation last year but has since left that process.

(Source: CoinDesk)