Customers at Abra, a crypto lender which claims to manage more than $700 million, are raising the alarm after the platform told some users that it has paused withdrawals.
“This decision is part of our broader risk management efforts and is also influenced by external circumstances outside of our control.”
It’s not clear what “external circumstances” the firm is referring to. Abra, which paid out millions in 2024 to settle alleged US regulatory violations, has not publicly announced the withdrawal pause.
Unsecured lending
The situation highlights the uncertainty involved in using platforms like Abra, which offer customers lucrative yields on their crypto assets, generated through a combination of decentralised finance activities and often unsecured lending.
Several similar platforms, including Celsius, BlockFi, and Finblox blew up in 2022 after borrowers defaulted on loans, costing customers billions of dollars in losses.
Reports that customers were not receiving scheduled payments and couldn’t withdraw their funds started appearing online in early June.
In recent Trustpilot reviews, those impacted reported the firm’s customer service representatives have cut them off, and ignored their requests to know why they can no longer access their funds.
Confused users
In the replies to the Trustpilot reviews, the official Abra account confused users with stock responses, and offered little help or guidance.
“We appreciate you taking the time to leave this review. Your feedback means a lot to us and we truly value input from users like you. We will strongly consider your comments and [are] always eager to learn how we can improve Abra for you,” one response said.
Meanwhile, Abra CEO Bill Barhydt has continued to promote the firm.
He has appeared on podcasts, given interviews, and posts multiple times a day on social media. In the replies to his posts, Abra customers regularly plead with Barhydt to answer their messages and return their funds, to no avail.
Launched in 2014, Abra styles itself as a crypto services and wealth management platform targeting institutions and high net worth individuals.
It boasts of managing $700 million for customers, and says it is an Securities and Exchange Commission-registered advisor and offers “fiduciary-grade compliance.”
The reports that users can’t withdraw their funds come just over a year after Abra reached a settlement with 25 US states over claims it had operated its business without the required licenses to handle crypto activities.
Abra was required to refund $82 million to US customers after halting services in the country in 2023. The states involved in the settlement all agreed to forgo fines in order for customers to be fully repaid.
The state filings cast a spotlight on Abra’s business practices.
In June 2023, the Texas State Securities Board accused Abra of securities fraud, alleging that the firm misled investors through sales of crypto yield products, according to state records. The board also said Abra had been insolvent or nearly insolvent at the time of the case.
In November 2023, the UK’s Financial Conduct Authority warned that Abra was not authorised to offer its services in the country and advised against dealing with the firm.
And a 2024 settlement with the state of Georgia’s Banking and Finance Department ordered that Barhydt be personally liable to return funds to US customers.
No answer
It’s not clear why the pause only impacts Abra’s international customers.
“A few months back I noticed that the ‘Borrow’ tab on the app, which was supposed to have your money and earn interest over time, had a 0.0% yield,” he said.
Alan said he chalked up the situation to a visual bug in the app. But after checking back multiple times, the app still said he wasn’t earning any yield.
Since then, the ability to withdraw crypto has been paused without notice, he said.
“I already wrote to support multiple times and I’ve had no answer so far.”
