Mercer Times

New Jersey investors are being urged to redeem their virtual assets from the Abra trading and lending platform as the California-based crypto company winds down its U.S. operations. This move follows a multistate investigation into Abra’s sale of interest-bearing crypto accounts, which raised $116 million nationwide, including more than $2.97 million in New Jersey.

In an agreement with the Bureau of Securities, Abra and its CEO and founder William John “Bill” Barhydt have agreed to refund all virtual assets remaining on the platform. This settlement aims to resolve allegations that they sold interest-bearing accounts, marketed as “Abra Boost” and “Abra Earn,” in violation of state securities laws.

Attorney General Matthew J. Platkin stated, "We have made it clear that firms creating new products tied to evolving technologies are not exempt from our securities laws." He emphasized that the Bureau of Securities will ensure investors purchasing digital asset securities receive the same protections as those buying traditional products.

Cari Fais, Acting Director of the Division of Consumer Affairs, noted, "The agreement announced today requires Abra to return the funds it raised through the unlawful sale of unregistered securities in our state." She added that these funds belong to New Jersey investors and should be returned.

According to the terms of the agreement, virtual assets in New Jersey accounts on Abra will be converted to U.S. dollars, and refund checks will be issued for amounts $10 and over. Amounts less than $10 will remain on the platform for withdrawal. Any uncashed checks or leftover funds will be sent to the New Jersey Department of Treasury’s Unclaimed Property Administration for later claims by owners. Abra is required to notify customers on how to remove assets from the platform.

Bureau Chief Elizabeth M. Harris urged New Jersey investors to withdraw their assets or accept checks from Abra platforms promptly: "We want to ensure that clients who purchased Abra financial products are able to recoup their investments."

Investors with account balances under $10 can withdraw funds via the Abra app or contact support@abra.com for assistance.

The settlement involves Plutus Financial Holdings Inc., Plutus Financial Inc. d/b/a Abra, Plutus Lending LLC, and Abra Boost LLC (collectively “Abra”) along with Barhydt. They offered interest-earning programs such as Abra Earn and Abra Boost by depositing digital assets with institutional borrowers.

A working group led by Texas State Securities Board has been investigating these offerings since June 15, 2023. Following coordinated enforcement actions against Abra and Barhydt, the company began winding down U.S. retail operations.

Despite allowing withdrawals since then, approximately $200,000 worth of cryptocurrencies belonging to New Jersey investors remains on the platform. The settlement confirms that as of June 15, 2023, Abra ceased accepting Earn and Boost crypto assets from customers and stopped making transactions available.

As part of this settlement, a consent order will require Abra and Barhydt to cease offering unregistered securities in violation of securities laws in New Jersey and imposes a suspended administrative penalty contingent upon compliance with returning all investor-owned assets.

The Bureau's investigation was managed by Deputy Bureau Chief Amy Kopleton and Investigator Delfin Rodriguez within the Division of Consumer Affairs. Deputy Attorney General Evan A. Showell represented them legally.

The Bureau emphasizes protecting investors from fraud and regulating New Jersey’s securities industry while advising investors always to "Check Before You Invest." For information or complaints regarding financial professionals or investments in New Jersey, individuals can contact 1-866-I-INVEST (1-866-446-8378) or visit their website.

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