(Bloomberg) -- The US Securities and Exchange Commission has settled with crypto lending platform Abra after charging the startup with selling unregistered securities to consumers and operating as an unregistered investment company.

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Plutus Lending LLC, doing business as Abra, agreed to settle with the SEC without admitting or denying the agency’s allegations. The startup will pay civil penalties which are yet to be determined by the court. Abra Earn allowed retail investors to deposit their crypto assets in return for interest. Abra Earn was promoted as a way for individuals to generate returns “auto-magically.” At its height, the Abra Earn program had roughly $600 million in assets, nearly $500 million from US investors, according to a SEC statement Monday.

The complaint alleges that Abra exercised discretion in how it invested consumer funds to deliver high yields. The complaint added that for at least two years Abra operated as an unregistered investment company because it issued securities and held more than 40% of its total assets, excluding cash, in investment securities, including loans of crypto assets to institutional borrowers. In June 2023, Abra began to wind down the Abra Earn program and told U.S.-based customers to withdraw their assets, according to the SEC.

“As alleged, Abra sold nearly half a billion dollars of securities to U.S. investors, without complying with registration laws designed to ensure that investors have sufficient, accurate information to make informed decisions before they invest,” Stacy Bogert, associate director of the SEC’s Division of Enforcement, said in the statement.

Abra investors included Amex Ventures, Blockchain Capital and the Stellar Development Foundation. At one point, the startup secured a $500 million valuation. In 2022, crypto lenders offering similar programs to Abra Earn including BlockFi, Celsius and Voyager filed for bankruptcy.

“No consumers were harmed at all by the settlement or wind down of Abra Earn,” an Abra spokesperson said in a statement. “All assets for US Earn customers including accrued interest were transferred to their Abra Trade accounts in 2023. Abra continues to operate in the USA via Abra Capital Management, an SEC-registered investment adviser.”

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