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In a recent development, the United States Securities and Exchange Commission (SEC) charged Plutus Lending LLC, which operates as Abra. They alleged that Abra offered and sold unregistered crypto asset securities through its lending product.

The SEC's complaint focuses on a service called Abra Earn. This service allowed U.S. users to earn interest on their cryptocurrency. According to the SEC, Abra used customer digital assets to generate income for itself and to fund interest payments. They also offered and sold securities that didn’t qualify for an exemption from SEC registration. Abra Earn attracted nearly $600 million in crypto assets. Out of that, about $500 million came from U.S. customers.

Stacy Bogert, who is the Associate Director of the SEC’s Division of Enforcement, said, “As alleged, Abra sold nearly half a billion dollars of securities to U.S. investors without complying with registration laws. These laws are designed to ensure investors have enough accurate information to make informed decisions.” She added, “To make matters worse, Abra allegedly sold its own securities while avoiding important protections under the Investment Company Act.”

In June 2023, the Texas State Securities Board took action against Abra and its CEO regarding Abra Earn. They accused them of securities fraud, as previously reported by The Block.