Crypto App Abra to Stop Offering Tokenized Stocks
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13 July
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A crypto-focused wallet and exchange app Abra will stop offering tokenized stocks and will pay a $300,000 fine for offering unregistered securities.

According to statements from the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), the company has been charged with offering and selling security-based swaps to retail investors without registration and for failing to transact those swaps on a registered national exchange.

Crypto Wallet Abra Restricts Services to U.S. Users Due to Regulatory Concerns

In February 2019 Abra started offering security-based swaps to investors in the US and abroad. The SEC claims that Abra marketed its app to retail investors, yet Abra made no efforts to determine whether users who downloaded the app were "eligible contract participants" as defined by the securities laws.

The Chief of the SEC Enforcement Division's Complex Financial Instruments Unit, Daniel Michael, says businesses cannot ignore the registration requirements created to provide investors with the information necessary to evaluate securities transactions.

"Further, businesses that structure and effect security-based swaps may not evade the federal securities laws merely by transacting primarily with non-US retail investors and setting up a foreign entity to act as a counterparty, while conducting crucial parts of their business in the United States," Michael added.

Last year, the cryptocurrency-focused mobile app announced a partnership with Plaid, a fintech company, to make it easier for users in the United States to convert USD to crypto by connecting and being able to seamlessly transfer funds to the Abra app.

Abra CEO and Founder, Bill Barhydt, said the app was taking yet another step closer "toward Abra's vision of democratizing access to financial services" for its hundreds of thousands of customers around the globe.

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