Crypto Lender Abra Has Been Insolvent for Months

[stompix]

Crypto Lender Abra Has Been Insolvent for Months, State Regulators Say
https://www.coindesk.com/policy/2023/06/15/crypto-lender-abra-has-been-insolvent-for-months-state-regulators-say/

TLDR
It has funds on paper only, as most of its funds are in bankrupt businesses, like Genesis and 3AC.

Filling here:
https://www.ssb.texas.gov/sites/default/files/2023-06/ENF_23_CDO_1873_NOH_Actions.pdf

I've just opened a topic about another lending platform being silent in SK, Haru, so what a surprise to have another one that was offering,

Generate up to 10% APY on your crypto*, compounded daily and paid out every Monday.

Again, probably a little too late to remind for a thousand times the thing about not your keys not your coins and to stop chasing huge returns trying to get rich doing nothing. The only thing I'm actually curious about is if we will have any of those "earning and earning" platforms alive by the end of the year!

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[348Judah]

Again, probably a little too late to remind for a thousand times the thing about not your keys not your coins and to stop chasing huge returns trying to get rich doing nothing.

There are still many custodial institutions still running and users unaware of the danger ahead, the recent events happening should teach them a lesson, you can imagine the rate exchange users are dumping them for a decentralized means of having their investment, we should be expecting more to have their bubbles bursted soon.

The only thing I'm actually curious about is if we will have any of those "earning and earning" platforms alive by the end of the year!

Most of them have no difference from a ponzi scheme because they share almost sae risk together whereby one can completely loose his investment with them, we get notified of some when they goes down while some remain unknown because we cannot obviously know all this platforms at once.

[o_e_l_e_o]

Change the word "Abra" to "Celsius" and that entire story could have been copy and pasted from a year ago. I am 100% certain we could post the same story this time next year with a dozen other platform's names substituted in instead.

It seems there is no shortage of people in this world who flat out refuse to learn any lessons from the past or pay any attention whatsoever to what is going on around them.

I have ran out of sympathy for people who still have their funds on these centralized scams exchanges and earning platforms. Absolute insanity by this point.

[_act_]

What I noticed is that people should be aware of crypto lending platforms,. The bull market is good for them but most of them were not able to survive during bear market. Crypto are not like fiat because they are more volatile, especially the altcoins which are very volatile.

There are some platforms that can give APY return, like the exchanges, but they have one disadvantage of not your key not your coin. It is not worth going for, to invest on centralized online places.

The only one that I have considered better are the staking using noncustodial wallets, not the ones like decentralized exchanges which can be hacked. Such exploits are common these days than how custodial exchanges are hacked. But staking directly using wallet is good if gotten rightly and staking at the right time. The reward is daily, but bear market can result to losses.

If someone can be patient enough, he can go for bitcoin which is safer. Bitcoin requires speculation, it is not what people should just go into, it requires studying about it and knowing the right time to invest and hold your bitcoin on a noncustodial wallet instead which can even be cold wallet.

I too will tell people to be careful of those custodial services.

I have ran out of sympathy for people who still have their funds on these centralized scams exchanges and earning platforms. Absolute insanity by this point.

When I am talking to some of my friends, they are novice and they do not know much about safety. There are some I introduced to this forum which later found out that what they were doing before was wrong. Ignorance is the cause of many people's mistakes. If not because of the lessons I have learnt on this forum, I may just be like them too.

[Z-tight]

Another one added to list of centralized exchanges and lending services to have bitten the dust in the last few months, and there will surely be more before the year ends, what will not change is that people would still have their money in these services anytime one of them collapses.

In looking for APY and "convenience", people give away the custody of their funds to these platforms that can go insolvent or collapse at anytime, all it takes is for one of their investments to fail or if the institutions they lent money to goes bankrupt, which will result in a domino effect. It is now like a cliche, but self custody solves all of these, "not your keys, not your coins".

[DaveF]

And people wonder why the government wants to come in and regulate.
How many people are going to loose everything because they were stupid and gave their money away to places like this.

It's not a new thing, businesses like this have been around scamming forever. And then as they get bigger and bigger and grandma and grandpa wind up loosing all their money the government comes in and tries to control them. So they move on to the next scam.

<shrug>

People are greedy and stupid, and we can't fix that. Kind of like the people who invested in gold back in 2012 and can't figure out why a decade later it's worth less then they paid for it....

-Dave

[ImThour]

I have heard this name for the first time in my life despite being in this community (active). So maybe not a big deal but it is because it's crypto, isn't it?
Everything in Crypto is BIG. So a lender called Abra getting insolvent in a bear market, where the biggest of the biggest fall is a big news.

[SamReomo]

Another scheme is blown into air, I have learnt about such platforms in 2021 and they were offering huge interests for the ones who would lock their crypto-currencies on their platform. The same model was followed by many exchanges and is still active on some exchanges. Some of those exchanges have lost all of their money during the bear market and crash of Terra Luna, and after that the platforms were just fooling the customers by showing them numbers only which had no intrinsic value in real world.

With the collapse of Terra Luna a lot of those exchanges have lost a good amount of money and they weren't able to recover the losses. Many of those exchanges were giving huge returns to the ones who were locking and staking their Luna on those platforms. They were confident that with Luna they will help them earn huge returns and the customers were falling into such traps because of their greediness. They were stacking all of their coins on such platforms and were thinking that they will be rich in a year and so on.

Those sites kept all of their users in dark when the market crashed when UST was de-pegged and Terra Luna went to $0 in few days. They all were in shock because none of them were expecting something like that to happen, and after the liquidation they did everything to hide their bankruptcy from the users. I don't think that someone who knows economics very well would ever fall into such schemes. The huge returns on stacking are always fake and they are Ponzi type of schemes to loot money from the wallets of the users to their own custodial wallets. I think promoting awareness about such sites is an important thing so that new users might not fall into such traps.

[aysg76]

Change the word "Abra" to "Celsius" and that entire story could have been copy and pasted from a year ago. I am 100% certain we could post the same story this time next year with a dozen other platform's names substituted in instead.

It seems there is no shortage of people in this world who flat out refuse to learn any lessons from the past or pay any attention whatsoever to what is going on around them.

I have ran out of sympathy for people who still have their funds on these centralized scams exchanges and earning platforms. Absolute insanity by this point.

As you have already said in earlier post they simply ignore all the stuff and how these centralised platforms are making money out of users pockets and later on declare themselves insolvent.They have in mind like it's not the case with them for instance the Binance and Coinbase users have in mind they are very safe and it would not happen to them but they miss have FTX users thought about it? It was the exchange supporting major centralised and lending platforms in the market but what happened after? The people lost money not these platforms so we will see people getting panicked after anything happens to them but Don't care for privacy or safety of funds so wny should we have sympathy for them.

[The Sceptical Chymist]

Change the word "Abra" to "Celsius" and that entire story could have been copy and pasted from a year ago. I am 100% certain we could post the same story this time next year with a dozen other platform's names substituted in instead.

Yep.  This is de-fi if I'm not mistaken (and please pardon my ignorance, but I never got past all of those extremely attractive advertised yields), and I've always figured that the market for crypto lending is based on pure speculation, i.e., people aren't borrowing it to finance houses or cars or whatever but to trade with.  And if that's the case, it doesn't seem like a sustainable business model to me--or a sustainable investment vehicle for the lenders.

But take a look at how many members we have on this forum who are desperate for money; desperate enough that they'll either scam for pennies or join some of the scammiest bounties in the hopes that they'll be rewarded with worthless tokens.  If you take that into account, it really isn't surprising that when a newly-formed company offers returns so much higher than the stock market (or any other market for that matter), they pounce on it.  It's understandable but unfortunate.

And while everybody is chasing these outrageous returns and the companies eventually go bust, what happens?  The regulators start taking notice and crypto comes under high scrutiny.  It's ultimately not good for any of us in the long term.

[Hispo]

Change the word "Abra" to "Celsius" and that entire story could have been copy and pasted from a year ago. I am 100% certain we could post the same story this time next year with a dozen other platform's names substituted in instead.

Yep.  This is de-fi if I'm not mistaken (and please pardon my ignorance, but I never got past all of those extremely attractive advertised yields), and I've always figured that the market for crypto lending is based on pure speculation, i.e., people aren't borrowing it to finance houses or cars or whatever but to trade with.  And if that's the case, it doesn't seem like a sustainable business model to me--or a sustainable investment vehicle for the lenders.

But take a look at how many members we have on this forum who are desperate for money; desperate enough that they'll either scam for pennies or join some of the scammiest bounties in the hopes that they'll be rewarded with worthless tokens.  If you take that into account, it really isn't surprising that when a newly-formed company offers returns so much higher than the stock market (or any other market for that matter), they pounce on it.  It's understandable but unfortunate.

And while everybody is chasing these outrageous returns and the companies eventually go bust, what happens?  The regulators start taking notice and crypto comes under high scrutiny.  It's ultimately not good for any of us in the long term.

I would like to point out that even thought it makes sense that the most of the lending volume of those platforms can be purely speculate, I still have hopes that in the future more people would move from centralized debt towards decentralized debt or at least crypto related loans.

It is something I have made before, I asked a relatively small loan (using Bitcoin as collateral) and I did not use it to gamble on shit-tokens but rather I bought a tablet I wanted to buy for a while. Paid back my debt and interest and end of the story. That is what it should be if we wished for the cryptographic ecosystem to start getting some of the market pie off the hands of banks.

[o_e_l_e_o]

This is de-fi if I'm not mistaken

"DeFi" is a meaningless buzz word. The majority (or indeed all?) of projects which style themselves as DeFi are not decentralized in the slightest. How can it be decentralized with a centralized third party can disappear with all your coins at any moment? Same as the term "DEX". I can count the number of exchanges which could genuinely be referred to as DEX on one hand, but there are hundreds of scam platforms out there advertising themselves as DEXs and enticing people to deposit their coins to buy the latest shiny shitcoin or stake for some obviously unsustainable return.

Out of interest, here is a post I made about DeFi three years ago:

I haven't spent a huge amount of time looking in to DeFi (so perhaps I shouldn't really comment at all), but from what I have seen, it seems to me to be exactly as you claim - unbelievable rewards and gains. Until someone can prove to me otherwise, as far as I am concerned it is essentially going to be the same as the ICO craze. A minority of lucky people will make very good returns, a lot of people will lose everything or almost everything they put in, and in a year or two 99% of the projects/coins/tokens will be dead and forgotten.

Seems like I was proven right. NFTs are already well on their way to the same fate, and the craze of bitcoin ordinals seemed to be over within a few weeks.

I'm sure it will only be a few months before the next craze of shiny trash comes along to help people rapidly lose their money. I've already seen the term "Centralized DeFi" or "CeDeFi" make the rounds, which is just outright hilarious.

[jossiel]

I've been contemplating about them for months or I think it's already a year, I've registered there but never pursue what I am about to deposit there. I guess my gut has saved me and then the issues of lending platforms came out.

They've got an interesting promise for their customers but then again, when a platform offers the same thing then we all got a signal of what we should avoid.

[KiaKia]

Abra wallet you mean?I've never like such a wallet and if you are familiar with open-source wallets you should know that Abra is not one of them, the closest to an open-source wallet that I can use is Trust wallet, I know it's not open source but it's better than other closed source wallets, should have been a better option over this Abra wallet too.

I also do not like crypto wallets that gives returns on your assets when you hold using their wallet it makes no sense because it just doesn't, they are doing this to attract users I get but you will never see an open source wallet giving up money to users using their crypto wallet.

[Frankolala]

The problem with people who keep their asset for more profit is greed. They are too greedy that they allow it to take over their senses. If not you know that a crypto lender platform can do away with your funds whenever they like and come up with the name of running out of liquidation.

It is always said that a centralized platform can't be trusted,because of their dubious act. They deceive you to safe your crypto in their platform and entice you with big interest, unknown to users that it is a way to scam them of their asset. Such companies are attracting the government to regulate crypto because of these actions.

[Z-tight]

Abra wallet you mean?I've never like such a wallet and if you are familiar with open-source wallets you should know that Abra is not one of them,

Not Abra wallet, it is their lending service that has gone bust. But i would not use any of their services, whether it is their crypto wallet, lending or staking services.

the closest to an open-source wallet that I can use is Trust wallet, I know it's not open source but it's better than other closed source wallets, should have been a better option over this Abra wallet too.

Trust wallet isn't at all close to an open source wallet, it is closed source and owned by Binance, i don't know why you think it is better than other closed source wallets, because it is not. Both Abra wallet, their lending services and Trust wallet are all not recommended, do not give away the custody of your coins for APY that are not realistic and use an open source and self custody wallet like Electrum for your BTC's, as for your shitcoins, unstoppable wallet is also recommended.

[Findingnemo]

snip~

Again, probably a little too late to remind for a thousand times the thing about not your keys not your coins and to stop chasing huge returns trying to get rich doing nothing. The only thing I'm actually curious about is if we will have any of those "earning and earning" platforms alive by the end of the year!

The same things can happen again and again because people will never learn anything until they took their greed out when it comes to investments. 10% isn't that much return, to be honest, and not really worth the risk which is 100%.

Simply holding the BTC in their wallet will give away huge returns if they go through the bull season so all they need to do is to buy and wait for the bull trend and then sell to make profits.

[DeathAngel]

Change the word "Abra" to "Celsius" and that entire story could have been copy and pasted from a year ago.

It always starts during parabolic runs up, people get into the next craze scam. It was ICO’s in 2017 then staking & NFT’s more recently. Then during a bear market phase these ponzis can’t stay solvent as liquidity & interest is taken away.

Like you & many others have said repeatedly, not your keys not your coins. There’s only so many times people can be advised. You just can’t help stupid.

We’ll be back discussing the same again but different in 2026 after the 2024/25 run up:

[mvdheuvel1983]

Wait is insolvency the same thing as bankruptcy in the crypto world?

Pretty sure there are people who knows the risk of keeping their crypto with these guys but then still go ahead to do it. They have their reasons and I do not blame them for it. It could be a way to make money or side hustle from these guys. They were prepared for this and willing bear the consequences.

As long as it is not my keys nor my coins, I wish those who still go ahead and leave their coins with these guys all the very best.

[hatshepsut93]

Again, probably a little too late to remind for a thousand times the thing about not your keys not your coins and to stop chasing huge returns trying to get rich doing nothing. The only thing I'm actually curious about is if we will have any of those "earning and earning" platforms alive by the end of the year!

Telling people won't change much, because a lot of "investors" won't read this forum or other sources of information that expose these scams. They go from knowing nothing about crypto other than it exists + can go high to clicking on a YouTube video shilling for some crypto opportunity to putting their hard earned money into a scam. Maybe some are doing "research" by googling the service they are about to use, and finding all the positive feedbacks on the first results page due to the SEO.

This is why the regulation is necessary, without it "crypto" will be synonymous to "scam" and it will be negatively reflecting on Bitcoin too. Not to mention the damage to economy and to society from these scams.