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The SEC’s stance on cryptocurrencies and providers continues to spark debates. The ongoing Ripple case and its battles with exchanges like Binance, Coinbase, and Kraken highlight the SEC’s position. Recently, the SEC filed a new complaint.
SEC Files a Complaint
According to an announcement on the SEC’s official site, today, a complaint was filed against Plutus Lending LLC, operating as Abra, for not registering the offers and sales of its retail crypto asset lending product, Abra Earn. Additionally, the SEC accused Abra of operating as an unregistered investment company.
According to the SEC’s complaint, in or around July 2020, Abra launched Abra Earn in the United States. Abra Earn allowed U.S. investors to deposit their crypto assets with Abra in exchange for a promised variable interest rate.
At its peak, the Abra Earn program was known to host approximately $600 million in assets, with around $500 million provided by U.S. investors.
The SEC’s complaint also stated that Abra operated as an unregistered investment company for at least two years, issuing securities and maintaining over 40% of its total non-cash assets in investment securities, including crypto asset loans to institutional borrowers.
Stacy Bogert, Deputy Director of the SEC’s Enforcement Division, said:
“As alleged, Abra sold approximately half a billion dollars in securities to U.S. investors without complying with registration laws designed to ensure investors have sufficient and accurate information to make informed decisions. To further exacerbate potential harm to investors, Abra allegedly bypassed provisions of the Investment Company Act that provide critical protections to investors, including minimizing conflicts of interest. This case underscores that we are guided by economic realities, not cosmetic labels, in our enforcement investigations.”
Bitcoin Price Update
While these events unfolded at the SEC, Bitcoin also continued its downward trend. After reaching $65,000 overnight, the price decline deepened and continued to fall at the time of writing.
Bitcoin’s price, following a 1.47% drop in the last 24 hours, remains at $63,242.
Although the current trading level is about $14,500 above the price on August 5th, when it dropped to $48,800, it is still over $10,000 below its all-time high.
