Abra Accused in Texas of Securities Fraud, Misleading Investors

Hannah Miller, Bloomberg News

Bill Barhydt, founder and chief executive officer of Abra, listens during the Bitcoin 2022 conference in Miami, Florida, U.S., on Thursday, April 7, 2022. The Bitcoin 2022 four-day conference is touted by organizers as "the biggest Bitcoin event in the world." , Bloomberg

(Bloomberg) -- Crypto trading platform Abra was accused of securities fraud by a Texas regulator that filed an emergency cease and desist order against the company and Chief Executive Officer Bill Barhydt.

The Texas State Securities Board alleged that Abra misled investors through sales of its Abra Earn and Abra Boost crypto interest accounts, according to a filing Thursday. The regulator said the company secretly transferred assets to Binance Holdings Ltd., which was sued last week by the US Securities and Exchange Commission and accused of running an unregistered crypto exchange.

In its filing, the board also claimed that Abra was insolvent or nearly insolvent in March when the regulator interviewed Barhydt. The CEO didn’t immediately reply to a text message and voice mail. An Abra representative didn’t immediately respond to an emailed request for comment.

Abra previously tussled with regulators and has paid multiple penalties. The company raised $55 million in 2021 from investors that included Amex Ventures, Arbor Ventures and Kenetic Advisors. It also teamed up with American Express Co. last year with plans to launch a crypto credit card on the AmEx network. The platform eliminated 5% of its workforce in the US and Asia last year.

Read more: Trading Platform Abra Is Latest Crypto Startup to Cut Jobs