Lawsuit Accuses Crypto Firm Abra of Breaching User Agreement in Dispute Over Minimum Withdrawals

News | May 17, 2024 By:

On Tuesday, April 30, 2024, Alexander Zajac filed a lawsuit against Plutus Financial Inc. in the Delaware Court of Chancery.

According to the complaint, Zajac opened an account with Plutus Financial, also known as Abra, in January 2022 after seeing promotional offers for cryptocurrency rewards. He deposited $5 and received various digital assets in return. For several months, Zajac invested these holdings and earned interest, growing his portfolio to around $34 in stablecoins and 700 CPRX tokens by June 2023.

However, Plutus Financial then announced it would require all U.S. retail customers to withdraw all cryptocurrency assets by July 31, 2023. When Zajac attempted to do so, he found he was unable to due to previously undisclosed minimum withdrawal amounts. Zajac reached out to Plutus Financial representatives for help but received no resolution to the problem.

In his lawsuit, Zajac argues this goes against clauses in Plutus Financial’s user agreement, which state customers maintain ownership of any supported digital assets held in their wallets on the company’s platform. The agreement also specifies that any disputes must go through binding arbitration. Zajac formally filed a complaint in July 2023 and again in August, but Plutus Financial did not respond to either attempt at arbitration.

In September 2023, Zajac filed a demand for arbitration with the American Arbitration Association, as outlined in the user agreement. However, Plutus Financial ignored communications from the AAA as well, resulting in the case being closed in January 2024.

Zajac is now seeking a court order to compel arbitration, along with reimbursement of the $455 in time and $3.99 in postal costs he has already spent pursuing his claims against Plutus Financial through the mechanisms agreed upon in their contract. The lawsuit alleges Plutus Financial mishandled cryptocurrency holdings in violation of both customer agreements and common standards for brokerages and digital asset platforms.

Please contact BlockTribune for access to a copy of this filing.