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Monday, July 13, 2020

ABRA CRYPTO APPLICATION CHARGED BY SEC FOR TRANSACTIONS THAT AFFECT THOUSANDS OF US STOCK PURCHASES AND ETFS


The Abra cryptocurrency application has been charged by two U.S. regulators: the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The company has agreed to stop and stop orders and penalties. The SEC said Abra employees "made thousands of shares and ETF purchases in the US to protect the contract."


Abra Crypto App Sanctioned in the US


The SEC and CFTC independently announced on Monday that they had approved the California-based Abra crypto application and its related company, Plutus Technologies Philippines Corp. d / b / a Abra International from the Philippines.

The SEC explained in its order that it had accused Abra and Philippine companies "for unregistered security-based swap transactions." The two companies allegedly "offered and sold security-based swaps to retail investors without registration" and they failed "to trade these swaps on registered national exchanges," the order details.

The securities regulator explained, "Abra developed and has an application that allows users to bet on price movements ... stocks and exchange-traded trading funds (ETFs) in the US," outlining:


"Abra told users they could choose securities whose performance they wanted to mirror, and the value of their contract would go up or down the same amount as the price of the underlying security."

 According to the SEC, this contract is a security-based swap subject to US securities laws. They were offered to retail investors, but "Abra did not take steps to determine whether users who downloaded the application were" eligible contract participants "as defined by securities laws," the SEC alleged. While Abra has moved certain operations overseas, the SEC said that Abra employees in California "design and market swap contracts, and screen and approve users who will be allowed to buy contracts." The security regulator added:


"The order further finds that Abra’s U.S.-based employees effected thousands of stock and ETF purchases in the U.S. to hedge the contracts."

"Without acknowledging or denying the findings on the order, Abra and Plutus agreed to the cease and termination order and to pay a combined penalty of $ 150,000," the SEC order explained.

Meanwhile, CFTC separately sanctioned the two companies "for conducting illegal exchanges of digital assets and foreign currencies with US and overseas customers and registration violations." The CFTC order also requires them to "pay a $ 150,000 civilian fine and to stop and stop further violations of the Commodity Exchange Act (CEA)." Effectively, Abra will pay $ 300,000 in total civil penalties.

Abra CEO Bill Barhydt wrote on Twitter that "Abra's business is going very well with our loyal US users leading. We have users in 100 countries with people making $ millions in deposits through banks, stable coins, bitcoin, credit cards, and more than 50 other cryptocurrency. "However, he did not want to comment on the SEC's order.

What do you think about the SEC and CFTC that are charging Abra? Let us know in the comments section below.


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