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Signs of a crisis for the encryption lending platform Abra? Sudden freeze on withdrawals for international users, $700 million in assets at risk.
The crypto assets lending platform Abra has reportedly quietly suspended withdrawal services for international users without any public announcement, triggering a new wave of "Celsius-style collapse" panic. According to DLNews, the platform notified some users via email on July 19 that "Abra Earn international services are immediately suspended," citing "broad risk management measures" and "uncontrollable external circumstances." Users reported that withdrawal freezes have lasted for several weeks, and customer service has cut off communication channels. This crisis erupted just a year after Abra reached a $82 million settlement for unlicensed operations with 25 states in the U.S., and the platform has been mired in regulatory penalties and financial difficulties in multiple countries in recent years. Abra claims to manage over $700 million in customer assets, and international users are likely facing a dilemma with no means of safeguarding their rights.
Silent Freeze: International Users Sudden Withdrawal Lock The Crypto Assets lending platform Abra is facing a major crisis. According to user reports and DLNews, Abra has quietly suspended withdrawal services for international clients without issuing any public announcement. Panic is spreading on social media, with many users demanding the unfreezing of funds, fearing that Abra may repeat the collapse of platforms like Celsius and BlockFi in 2022.
On July 19, some users received an email notification from the platform stating that "due to broader Risk Management efforts and uncontrollable external circumstances, Abra Earn's international services are suspended immediately." Abra claims to manage over $700 million in customer Crypto Assets.
Communication Breakdown: CEO's Continuous Marketing Sparks Public Anger Affected international users report that the withdrawal function has been frozen for several weeks. What angers them even more is that the platform's customer service not only cut off communication channels but also completely ignored requests for explanations. Desperate users flooded social media, directly calling out to CEO Bill Barhydt, who continues to promote the company's business while avoiding inquiries.
This crisis coincides with the one-year anniversary of Abra's significant settlement with 25 states in the United States. In June 2024, Abra was ordered to return $82 million to customers for operating without a license. Earlier in 2023, Texas regulators had accused Abra of being insolvent since March 2023. Issues with user returns and withdrawal problems first surfaced online in early June, with some users pointing out that the interest rate for previously interest-bearing accounts had suddenly dropped to zero.
Regulatory Pressure: Violating Operations and Financial Predicament Abra's current crisis is the culmination of years of violations and financial troubles.
International users trapped in rights protection dilemma, platform transformation difficult to hide crisis Currently, the withdrawal suspension seems to only affect international users, but the reason for the regional restrictions is unclear. Guatemalan user Alan disclosed to DLNews that after noticing the earnings from his interest-bearing account dropped to zero, his $1200 deposit has become unwithdrawable.
The response from Abra customer service is becoming increasingly templated, with the official account only providing standardized replies that lack substantial help. Recent Trustpilot reviews indicate that customer service representatives directly cut off communication and completely ignore requests for access to funds.
In stark contrast, CEO Barhydt remains active on social media and participates in podcast promotions daily, while users plead for responses in the comments section of his tweets. This marketing activity exacerbates user anger and concern amid the disconnect with the paralyzed customer service.
Abra claims that the management of $700 million in assets means that if withdrawal restrictions continue or expand, users will face significant risks. Unlike the previous collapse of crypto lending platforms that primarily affected US users, international users may lack effective regulatory relief channels.
It is worth noting that in mid-2024, as Abra shows signs of fatigue in serving its existing retail customers, it still boldly launched the Abra Prime and Abra Private platforms aimed at institutional and high net worth clients, and released the enterprise Bitcoin reserve management product Abra Treasury.
So far, Abra and its CEO Bill Barhydt have not made any public statements regarding the suspension of withdrawals or user concerns.
Conclusion: The sudden freezing of withdrawals for international users of Abra unveils a new round of crisis for this crypto lending platform, which has repeatedly faced heavy regulatory penalties. From exorbitant settlements in multiple states in the U.S. to a crackdown by regulators in the UK and the U.S., and the subsequent penalties from the SEC, Abra's history of regulatory violations has set the stage for its current predicament. The CEO's evasive stance towards user inquiries, combined with a high-profile marketing approach, and the complete severance of communication with customer service, have intensified market concerns regarding the platform's liquidity. International users face unique risks with no avenues for recourse, as $700 million in assets hangs in the balance. If Abra cannot quickly restore withdrawals and provide transparent explanations, it could become another fallen domino in the crypto lending sector, once again warning investors about the regulatory arbitrage and operational risks of centralized crypto asset management platforms.