New Jersey Regulators Urge Crypto Investors to Withdraw From Abra Amid US Shutdown

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

August 13, 2024 00:22 EDT

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New Jersey regulators urged investors to withdraw any remaining crypto assets from their accounts on crypto lender Abra.

They highlighted in a press release Monday that 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 (MSB) licensing.

Abra Agrees to Refund Crypto Assets in Settlement Over Unregistered Accounts

As part of the agreement, Abra and its CEO William John “Bill” Barhydt agreed to refund all virtual assets remaining on the platform. Further, the settlement aims to resolve allegations that it illegally sold interest-bearing accounts, “Abra Boost” and “Abra Earn,” which violated state securities laws.

“The agreement announced today requires Abra to return the funds it raised through the unlawful sale of unregistered securities in our state,” said Cari Fais, acting director at the Division of Consumer Affairs.

“These funds belong to New Jersey investors, and we want to make sure investors get them back.”

Also, under the agreement terms, crypto held in New Jersey accounts will be converted to USD. Checks will be issued for amounts exceeding $10. Smaller amounts will remain on the platform for withdrawal. Moreover, unclaimed funds will be transferred to the New Jersey Department of the Treasury’s Unclaimed Property Administration. Abra must inform New Jersey customers about withdrawing their assets.

Abra Agrees to Refund $82M in Settlement with 25 States Over Licensing Violations

A group of state securities regulators, led by Texas, has been investigating Abra’s interest-bearing accounts. Starting June 2023, multiple states, including New Jersey, took legal action against Abra and its CEO. As a result, Abra began closing down its US operations.

While most customers have withdrawn their funds, about $200,000 in cryptocurrency belonging to New Jersey investors remains on the platform.

In June, Abra and its CEO reached a settlement with 25 states to resolve allegations that it operated without proper licenses. As part of the deal, Abra agreed to return up to $82.1m to customers in those states. To prioritize customer refunds, the states involved waived potential penalties.