Officials with the Texas State Securities Bureau settled its lawsuit against Abra on Monday, clearing a path for the crypto lender’s investors to withdraw millions of dollars worth of previously frozen funds.
Under the settlement’s terms, Abra must allow roughly 12,000 investors to claim crypto they deposited in interest-bearing accounts such as Abra Boost and Abra Earn, the Texas Securities Commissioner said in a notice to consumers. Those funds, worth roughly $13.6 million last year, were locked up on the firm’s platform last summer, the notice shows.
The agreement, if honored, will dismiss a rash of enforcement actions over Abra’s offering of its Earn and Boost investment products at a time when it was nearly – if not completely – insolvent, according to the TSC. The TSC alleged the products were securities, meaning the registration of both products falls under the agency’s purview.
The TSC did not immediately reply to CoinDesk’s request for comment.
Abra must open up withdrawals, in addition to completing other stipulations laid out in the agreement, within the next 30 days, according to the notice.
Abra clients with balances greater than $10 will receive a notification about how to retrieve funds from their accounts, which must be done during a seven-day withdrawal window. Any unclaimed funds will be converted to U.S. dollars and sent as checks to investors in Texas, according to the settlement’s terms.
This settlement comes on the heels of a flurry of similar settlements between cryptocurrency companies and state and federal regulators. Last week, Digital Currency Group (DCG) subsidiary Genesis Global Capital reached a $8 million settlement with regulators in New York.