The United States Securities and Exchange Commission (SEC) announced that cryptocurrency platform Abra had agreed to a settlement over allegations the firm did not register the offers and sales of its lending product.

In an Aug. 26 notice, the regulator said Plutus Lending, doing business as Abra, “without admitting or denying the SEC’s allegations,” had agreed to pay civil penalties to be determined by a court and an injunction prohibiting the firm from violating securities laws. The SEC filed charges against the lending platform for failing to register the offers and sales of Abra Earn and operating as an unregistered investment company.

The SEC alleged Abra marketed its Earn service as a way for investors to earn interest “auto-magically” and instead generated income for itself. The platform began offering Abra Earn to US investors in July 2020, facilitating roughly $600 million in assets globally at its peak.

“[...] Abra allegedly sold its own securities while skirting applicable Investment Company Act provisions that provide a number of important protections to investors, including minimizing conflicts of interest,” said SEC enforcement associate director Stacy Bogert. “This matter reflects yet again, that in conducting enforcement investigations, we are governed by economic realities, not cosmetic labels.”

An Abra spokesperson told Cointelegraph that the platform had discontinued Abra Earn in 2022, and it had transferred assets for US-based users of the service to their Abra Trade accounts in 2023. They added that Plutus Lending “agrees to continue to comply with securities laws.”

This is a developing story, and further information will be added as it becomes available.