- Abra settles with U.S. state regulators for operating without licenses.
- Gemini’s Earn program settles and guarantees $1.1 billion for users amid regulatory challenges.
In a recent turn of events, Abra has reached a settlement agreement with financial regulators from 25 U.S. states over allegations of operating without proper licenses.
Notably, this action not only targeted Abra but also its subsidiaries and CEO, William Barhydt.
The terms of the settlement
Elaborating on the same, a press release by the Conference of State Bank Supervisors (CSBS) noted,
“Once the remaining virtual assets are returned pursuant to the settlement terms, up to $82.1 million will be paid back to consumers.”
This underscored the rise in illicit activities and also the efforts made across various U.S. jurisdictions regarding consumer protection.
Appreciating the efforts made by the U.S. jurisdictions, CSBS Chair and Washington State Department of Financial Institutions Director, Charlie Clark in a press release report said,
“State financial regulators take their role to protect consumers and prevent unlicensed activity seriously. Companies that do not operate within the bounds of state laws will be held accountable.”
Investigation details
For context, this investigation was carried out by state financial regulators from several states, including Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington.
During the investigation process, the regulators found that Abra had been offering cryptocurrency-related services through its mobile application without obtaining the necessary licenses.
Notably, Abra agreed to stop accepting virtual asset deposits from its U.S. customers and ceased cryptocurrency buying, selling, and trading services for U.S. customers back on June 15, 2023.
Additionally, Abra was also supposed to refund any remaining virtual assets held by U.S. customers in the participating states.
Remarking on this entire scenario, an Abra spokesperson said in a statement,
“Abra is pleased to enter into a Term Sheet negotiated with a working group from the Money Transmitters Regulators Association regarding the Abra App that Abra previously offered in the U.S.,”
Gemini caught up with the same loophole
Needless to say, this isn’t the first time such an event has unfolded.
In fact, recently the New York State Department of Financial Services (DFS) announced that Gemini, in collaboration with Genesis and other creditors, was operating outside the DFS regulatory oversight.
Following this, Genesis reached a settlement agreement with the DFS, wherein the Earn program users were guaranteed to receive “100% of their digital assets back in kind,” totaling approximately $1.1 billion.
Hence, as the US is navigating digital asset regulation amidst widespread adoption, such cases emphasize the importance of adhering to regulatory frameworks to maintain trust and stability in the financial ecosystem.
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