New Jersey investors urged to redeem funds from Abra amid crypto company’s shutdown

New Jersey’s attorney general urged investors in the state to withdraw their funds from cryptocurrency lending and trading platform Abra after the company shut down its U.S. operations following a multi-state investigation into the sale of unregistered securities.

Attorney General Matthew Platkin advised New Jersey investors with accounts in the California-based cryptocurrency firm to quickly withdraw their assets before the company withdraws from the U.S. market, in a statement dated August 12.

Platkin’s warning comes after an agreement in principle between the Abra platform, its CEO William Barhydt and the New Jersey Securities Bureau.

The settlement addresses allegations that Abra illegally sold interest-bearing crypto accounts known as Abra Boost and Abra Earn to investors, with New Jersey residents purchasing approximately $3 million worth of the products.

As part of the settlement, the crypto company is required to return all crypto assets remaining on the platform to investors. The funds will be converted to US dollars and refund checks will be issued for amounts of $10 or more, according to the attorney general’s statement.

However, for balances under $10, investors can withdraw funds directly through the Abra app. Any unclaimed funds will then be transferred to the New Jersey Department of Treasury’s Unclaimed Property Administration.

Following the enforcement actions, Abra initiated the divestment of its U.S. retail operations. The settlement is the result of a coordinated effort led by a working group of state securities regulators, including the Texas State Securities Board.

The investigation into the cryptocurrency company began in mid-2023 and focused on the legality of Abra’s offerings and financial products.

At the time, TSSB had taken legal action against Abra, claiming that the company had intentionally concealed key financial information such as party capital, loan defaults, operating history, and asset transfers to platforms like Binance.

After months of investigation, Abra has reached a settlement with PTSD, allowing users of the platform to withdraw their funds. Similar to the recent New Jersey settlement, Abra users in Texas with more than $10 in assets were given checks, while those with less than that amount were able to withdraw funds directly from the Abra app.

About 12,000 Texans have invested about $13.6 million in Abra’s financial products, including Abra Boost and Abra Earn.