Washington DFI Joins CSBS Regulators in Multistate Settlement with Abra to Cease Operations and Return Assets

OLYMPIA - The Washington State Department of Financial Institutions (DFI) joins 24 other state financial regulators in taking collective action against Plutus Financial, Inc., Abra Trading, LLC, Plutus Financial Holdings, Inc., Plutus Lending, LLC (collectively known as "Abra"), and CEO, common control person, and largest equity owner William "Bill" Barhydt for operating a cryptocurrency company without receiving the required state licensing. State regulators and the Conference of State Bank Supervisors (CSBS) announced a multistate settlement agreement today. Additionally, Washington State entered into a consent order with Abra today.

A workgroup of state financial regulators from Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington State investigated and found that Abra operated a mobile application for buying, selling, trading, and investing in cryptocurrency without obtaining the required licenses. Led by Washington State, the workgroup negotiated a settlement agreement with Abra, where Abra ceased accepting virtual asset allocations from U.S. Abra Trade Account customers into their products and services, and ceased making, buying, selling, or trading of cryptocurrencies available to U.S. Abra Trade customers as of June 15, 2023.

The settlement agreement requires Abra to refund any remaining virtual assets on its platform for Abra Trade customers in settling states.

"State financial regulators take their role to protect consumers and prevent unlicensed activity seriously," said CSBS Chair and Washington State Department of Financial Institutions Director Charlie Clark. "Companies that do not operate within the bounds of state laws will be held accountable."

The states participating in the settlement agreed to forgo a monetary penalty of $250,000 per jurisdiction to facilitate customer repayment. Once the remaining virtual assets are returned pursuant to the settlement agreement, up to $82.1 million will be paid back to consumers. The investigation and settlement took place in conjunction with a separate investigation by state securities regulators that, to date, has returned $13.6 million to investors.

Additionally, under the settlement, Barhydt is restricted from engaging in the business or affairs of any money transmitter or money services business in any capacity other than as a passive investor for five years.

State financial regulators license and supervise more than 33,000 nonbank financial services companies through the Nationwide Multistate Licensing System (NMLS), including mortgage companies, money services businesses, consumer finance providers, and debt collectors. Many states also license cryptocurrency companies.

Consumers who have questions about the settlement or believe they may have been impacted by Abra's unlicensed activity should contact their state regulator. Consumers can also visit NMLS Consumer Access to verify that a company is licensed to do business in their state and view past enforcement actions.

For more information, please see the background Q&A document.

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