Crypto Trading App, Abra, Forks Over $300k to SEC, CFTC for Offering Synthetic Exposure to US Stocks

The SEC and CFTC had filed charges against Abra and its Philippine affiliate, Plutus, citing violations in their U.S market operations.

Abra, the crypto-based financial app, has settled a total of $300k with the U.S Commodities Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) as per an announcement by both financial watchdogs on July 13. However, the firm did not deny or accept security laws violation charges brought forward by both agencies.

The SEC and CFTC had filed charges against Abra and its Philippine affiliate, Plutus, citing violations in their U.S market operations. According to the SEC, Abra offered unregistered security-based swaps to retail investors and failed to check the eligibility of participants:

“The order finds that Abra marketed its app to retail investors, yet Abra took no steps to determine whether users who downloaded the app were “eligible contract participants” as defined by the securities laws.” reads the SEC press release.

CFTC, on the other hand, charged Abra with facilitating illegal off-exchange swaps based on digital currencies:

“Entering into illegal off-exchange swaps in digital assets and foreign currency with U.S. and overseas customers and registration violations.”

It's not the first time Abra has found itself at cross paths with the U.S regulators. Last year, the firm had, halted its operations following an SEC warning but resumed shortly after having ‘cut off' U.S retail investors.

Records, however, show that Abra's activities were still run from California and partly covered the U.S market despite the SEC threat. Daniel Michael, the SEC Enforcement Division's Complex Financial Instruments Unit Chief, has since emphasized the underlying obligations in such a case:

“Businesses that structure and effect security-based swaps may not evade the federal securities laws merely by transacting primarily with non-U.S. retail investors and setting up a foreign entity to act as a counterparty while conducting crucial parts of their business in the United States.”

SEC and CFTC Combined Efforts

The two regulatory agencies have been working together as more digital assets seek to launch in the promising U.S retail market. Just recently, the CFTC chairman said that the listing of more crypto-based derivatives is pegged on SEC's decisions on commodity classifications. That said, Abra's case is the latest to reveal a combined effort by both agencies to protect U.S consumers. James McDonald, CFTC Director of Enforcement, acknowledged the progress in collaboration with the SEC so far:

“This case underscores, once again, that the Commission will continue working with our regulatory partners to ensure the integrity of our markets, including those involving digital assets.”

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Edwin Munyui
Edwin Munyui
Edwin is a FinTech enthusiast with a particular interest in blockchain technology and cryptocurrencies. He has worked as an author in the blockchain space since 2017 and enjoys creating content that both crypto veterans and newbies can understand. His simple writing style and financial market knowledge have made him a reputable fundamental and technical analyst with the ability to handle any topic around blockchain and crypto over the years.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Former Bank of China VP Backs Digital Yuan As An Accelerator for a ‘Dual Circulation'

A former Vice President of Bank of China has said that replacing the fiat RMB in circulation (M0) with a CBDC is the way...

ZEC Breaks Out of 3-Year Bear Market as Executive Director Bids Adieu to Zcash Foundation

The inaugural executive director of Zcash Foundation, the company behind the 24th largest cryptocurrency by market cap $845 million ZEC, has left the Foundation....

US Travel Firm Pays 414 Bitcoin worth $4.5 million to Hackers

US travel management company CWT paid 414 Bitcoin, worth $4.5 million, to hackers who stole sensitive corporate files and reportedly knocked 30,000 computers offline....

Florida Teenager, the ‘Mastermind' Behind Twitter ‘Bit-Con' Hack, Arrested

A Tampa, Florida teenager has been accused of being the ”mastermind” behind the biggest hack on Twitter and has been placed under arrest. 17-year-old Graham...

Bitcoin Celebrates USD’s Loss of Power as The Dollar Records its Worst Month in a Decade

Bitcoin is shining bright with a new 2020 high at about $11,740. Interestingly while the digital asset has been trending up, the US...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today