Sued Abra for securities fraud
The Texas Securities Commission announced on the 15th that a group of companies known as Abra, which provided cryptocurrency and stock investment apps, and its founder and CEO Bill Verheidt. filed a lawsuit against it.
Allegations of securities fraud and intentional concealment of financial information have alleged. It also alleges that Abra is in or near bankruptcy as of March 31, 2023.
The law enforcement action includes requests for information disclosure, such as disclosure of financial information. It also prioritizes the return of assets to investors.
What is the Texas Securities Commission?
Securities regulator of Texas, USA. Its purpose is investor protection, and its services include legal enforcement, registration, inspection and compliance, legal advisory and staff services.
Inappropriate description or concealment of financial information
According to the Texas Securities Commission (TSSB) complaint, Abra also offered U.S. investors its cryptocurrency yield products, Abra Earn and Abra Boost.
TSSB warned Abra about offering “Abra Earn,” but Abra is offering the product to accredited and non-accredited investors until around October 2022. After that, it continued to provide a new product name to “Abra Boost” for accredited investors only.
The TSSB said Abra made “descriptions that are likely to be grossly misleading or misleading the general public” about these products.
Specifically, Abra made misleading statements about its capital raising and operational history. He also said he did not meet the contract to finance the assets deposited by investors in Abra.
In addition, it is alleged that on June 11, Abra falsely claimed on its official social media that “Abra is not bankrupt,” even though it was almost bankrupt as of March this year.
The TSSB alleges that Abra concealed financial information that it had transferred assets to the global version of major cryptocurrency exchange Binance. The complaint contains the following passage:
The defendant secretly transferred assets to Binance Holdings Limited DBA Binance, commonly known as Binance.com. As of February 2023, the defendant had assets worth approximately $120 million (approximately ¥16.8 billion) on Binance.com.
Global Binance is not an exchange authorized to serve US residents.
In connection with Abra’s near bankruptcy, TSSB noted that Abra had made loans to cryptocurrency companies that failed last year.
As of February, Abra had more than ¥1.7 billion ($12 million) in bankrupt FTX, about ¥4.2 billion (about $30 million) in Babel Finance, and about ¥4.2 billion (about $30 million) in Genesis. , Approximately 1.4 billion yen (approximately 10 million dollars) was loaned to Three Arrows Capital (3AC). These exchanges are in the process of filing for bankruptcy and financial arrangements.
Abra was founded in 2014. It offers individual and institutional clients a cryptocurrency platform with services such as trading, lending and borrowing. In 2022, there will be staff reductions.
In 2020, it settled a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC). The SEC has accused Abra of “providing and selling securities-based swap products to unregistered retail investors.”