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Regulators Accuse Abra Group Crypto of Securities Fraud

Published:

The TSSB (Texas State Securities Board) has filed a lawsuit against the company and its Chief Executive Officer, William John “Bill” Barhydt.

According to the investors who are participating in Abra Boost and Abra Earn, the defendants are taking part in deceptive practices and securities fraud.

According to the TSSB, Abra Group intentionally concealed vital financial information such as loan defaults, party capitalization, and asset transfers to Binance.

Thus; as of 31 march this year, the companies related to this matter were either insolvent or on the edge of bankruptcy.

READ ALSO: Binance U.S and SEC To Agree On Asset Freeze

More Details of the Story

In a court filing yesterday, the TSSB  reported that Abra Group deceived investors by selling its Abra Earn and Abra Boost cryptocurrency interest accounts.

In addition, it withheld crucial information from the shareholder of Abra Boost which includes party capitalization, defaults on loans obtained by investors’ assets, and operating history.

Furthermore, the regulator reported that Abra Group secretly made asset transfers to Binance Holdings Ltd.

Recall that last week, the United States SEC sued Binance for operating an unregistered cryptocurrency exchange.

As per the filings, TSSB claimed that last March, Abra was Insolvent or on the brink of bankruptcy when the authorities interviewed its CEO Barhydt.

However, by June 11 this year, “Abra isn’t bankrupt” reported an official social media platform which is related to its holding company.

Meanwhile, the CEO of Abra isn’t making response yet to a voicemail or text messages requesting him to comment.

Details of the Order

The TSSB Enforcement Division issued an emergency Cease and Desist order together with a Notice of Hearing to Abra Group.

Allegedly, Abra Group sold Abra Earn to unaccredited and accredited investors while selling Abra Boost to only accredited investors.

The investors who took part reportedly transferred their digital assets to the interest-bearing accounts with up to 10% interest rates.

Disclosure from the complaints shows that the Texas State Securities Board Enforcement Division previously warned the defendants.

However, the sale of Abra Earn continued right up to October last year.

At the time, Abra Group shifted its main focus to promoting Abra Boost.

Then, they also relied on Regulation D, Rule 506 to dodge investor protection measures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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