Texas securities regulator alleges in cease-and-desist that Abra crypto lender has been insolvent for months

In an emergency cease-and-desist issued on June 15, the Texas State Securities Board alleged that the Abra crypto lending firm was "insolvent or nearly insolvent" as of interviews conducted on March 31. The filing alleged that Abra and its founder William Barhydt had made investment offerings that were materially misleading, accusing them of securities fraud. Despite not contesting securities regulators' conclusion that Abra was insolvent, Abra repeatedly posted statements on social media such as the one on June 11, where they wrote "Abra is not bankrupt".

According to the complaint, although Abra claimed it stored customer funds with the Fireblocks crypto custodian, they had actually been "secretly transferring assets" to Binance.

The regulator also alleged that Abra had around $30 million in assets with Babel Finance, $30 million with Genesis, and $10 million with Three Arrows Capital — three companies in various stages of liquidation or bankruptcy. They also have $8.8 million with Auros, a firm that was in liquidation but has since exited the process.

Auros files for bankruptcy

Crypto market maker Auros filed for bankruptcy protection in the British Virgin Islands, not long after a missed loan repayment to the Maple defi lender in late November signaled something was amiss. At the time, Auros attributed the missed payment of 2,400 wETH (valued at ~$3 million at the time) to a "short-term liquidity issue as a result of the FTX insolvency".

Now, however, Auros is seeking a "light touch" liquidation path that would allow them to continue operations while they develop a restructuring plan. Meanwhile, they have missed another Maple loan repayment, this time for $7.5 million.

Court filings have revealed that "a significant proportion of the Company's assets" are frozen with FTX, leaving the company insolvent. These assets have an estimated value of $20 million.

Auros misses loan payment due to FTX exposure

Crypto trading firm Auros missed a payment on its 2,400 wETH (~$3 million) loan from the Maple defi lending project. According to M11 Credit, the operator of the credit pool from which Auros has taken the loan, this was due to "a short-term liquidity issue as a result of the FTX insolvency".

In total, Auros has 8,400 wETH (~$10.7 million) and $7.5 million in USDC in loans from M11 credit pools, plus another $2.4 million in loans from the Clearpool defi lending project, for a total of more than $20 million in unsecured loans.

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