The SEC reaches a settlement with cryptocurrency lender Plutus Lending LLC, which does business as Abra.

The Securities and Exchange Commission has reached colony With cryptocurrency lending company Plutus Lending LLC, which operates under the name Abra. The settlement resolves allegations that Abra violated federal securities laws by failing to register its retail cryptocurrency lending product, Abra Earn, and by acting as an unregistered investment trust.

As part of the agreement, Abra agreed to pay a civil penalty of $1.65 million and comply with a permanent injunction imposed by the court. second.

Although Abra settled the case without admitting or denying the allegations, the SEC said the executive action underscores its commitment to protecting investors in the volatile cryptocurrency market.

Ibra Earn

The SEC charges stem from Abra's offering of Abra Earn, a financial gain program. Allowed US investors lend cryptocurrencies in exchange for interest payments. According to the Securities and Exchange Commission, Abra marketed the program as a safe investment and, at its peak, managed more than $600 million in assets — nearly $500 million of which came from U.S. investors.

In addition, the company held more than 40% of its assets in investment securities, in violation of the Investment Company Law.

The SEC's settlement with Abra comes amid increasing scrutiny of cryptocurrency lending platforms.

In August 2024, New Jersey Attorney General required Abra will return remaining cryptocurrency assets to investors and issue refunds as part of a multi-state investigation.

This case mirrors other SEC actions, including the February 2024 settlement with Genesis Global Capital over its Gemini Earn program. The SEC continues to target companies that do not comply with registration and disclosure requirements, focusing on the risks posed by unregistered securities in the cryptocurrency sector.