New Jersey regulators have urged investors to withdraw any remaining crypto assets from their accounts on crypto lender Abra, as the California-based company is ceasing operations in the US. This follows a multistate investigation into Abra for operating without the required state money services business licensing. As part of the agreement reached, Abra will refund all virtual assets remaining on the platform and convert crypto held in New Jersey accounts to USD, issuing checks for amounts exceeding $10.
The settlement aims to resolve allegations that Abra illegally sold interest-bearing accounts, “Abra Boost” and “Abra Earn,” which violated state securities laws. The Division of Consumer Affairs acting director in New Jersey, Cari Fais, stated, “The agreement announced today requires Abra to return the funds it raised through the unlawful sale of unregistered securities in our state. These funds belong to New Jersey investors, and we want to make sure investors get them back.” Additionally, unclaimed funds will be transferred to the New Jersey Department of the Treasury’s Unclaimed Property Administration, and Abra must inform New Jersey customers about withdrawing their assets.
In June, Abra and its CEO reached a settlement with 25 states to resolve allegations of operating without proper licenses. Following the legal action taken by multiple states, Abra began closing down its US operations, with most customers already having withdrawn their funds. However, about $200,000 in cryptocurrency belonging to New Jersey investors remains on the platform. As part of the settlement deal, Abra agreed to refund up to $82.1 million to customers in the states involved, with potential penalties being waived by those states to prioritize customer refunds.
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As the cryptocurrency market continues to evolve, regulatory compliance is becoming increasingly important for companies operating in the sector. The case of Abra highlights the consequences of operating without the necessary licenses and the importance of adhering to regulatory requirements. By reaching settlements with state regulators and agreeing to refund affected customers, Abra is taking steps to address the issues raised and comply with legal obligations. This serves as a reminder to other companies in the crypto space to prioritize regulatory compliance to maintain trust and credibility within the industry.
