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The SEC and CFTC fined Abra $150,000 for unregistered cryptocurrency swap sales

A general exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington, June 24, 2011. The database is emerging alongside a new program by the FBI's criminal profiling group in Quantico, Virginia, that is creating a series of behavioral composites to help agents investigate white collar crime. The more systematic approach by the SEC and FBI comes in response to the growth and complexity of financial crimes in recent years. Picture taken June 24, 2011. To match Special Report SEC/INVESTIGATIONS REUTERS/Jonathan Ernst (UNITED STATES - Tags: CRIME LAW POLITICS BUSINESS) - RTR2PCBJ

The SEC and CFTC fined Abra $150,000 for unregistered cryptocurrency swap sales

US regulators accuse the startup Abra of unregistered sale of swaps with securities for crypto assets. Abra is fined $150,000.

According to a press release from the us securities and exchange Commission (SEC), using the Abra crypto investment application, users signed contracts that provide access to the dynamics of securities and exchange-traded funds (ETFs), as well as made trading transactions through the blockchain. With the help of the us commodity futures trading Commission (CFTC), the SEC found that the Abra platform and its affiliated Philippine company Plutus Technologies sold swaps with securities for cryptocurrencies without registration on the national exchange, which violates US securities laws.

It is reported that Abra began offering such contracts to retail investors from the United States and other countries in February 2019. According to the SEC, Abra did not take any steps to determine whether users who downloaded the app met the terms of the contract under US securities law. In the same month, Abra stopped selling such swaps after notifying the SEC, but resumed this activity in may 2019, limiting its offers to American investors. This means that part of Abra’s operations took place outside the US, with platform employees in California promoting swap contracts to us investors, and then selecting users who could buy these contracts. The SEC found that American employees of Abra made several thousand transactions to buy shares and ETFs in the US to hedge contracts.

The SEC and CFTC ordered the firms to stop committing misconduct and refrain from resuming it. Abra and Plutus Technologies pleaded not guilty, but did not challenge the regulators ‘ charges, agreeing to pay a $150,000 fine.

“Platforms that work with securities are required to undergo mandatory registration and must provide investors with all the information necessary for risk assessment. Firms offering swaps based on securities will not be able to evade Federal securities laws, even if they are registered in another country as a counterparty, because most of their business is conducted in the United States, ” said Daniel Michael, head of the SEC’s Department working with complex financial instruments.

Recall that in November last year, the SEC and CFTC accused the company First Global Credit (XBT) of unregistered sale of swaps for bitcoin. In addition, last week, the Chairman of the us commodity futures trading Commission (CFTC), Heath Tarbert, said that the launch of new cryptocurrency futures in the US depends solely on the decision of the SEC.