Crypto trading platform Abra has disclosed that it acquired several private cryptocurrency trusts from Valkyrie Investments in May 2024. This move marks a significant expansion of Abra’s digital asset portfolio.
Details of the Acquisition
Abra Capital Management LP has taken over Valkyrie’s Tron and Zilliqa trusts, along with other unnamed digital asset trusts. The Zilliqa Trust had sold $21.3 million in assets, while the Tron Trust had sold $50 million. Marissa Kim, the head of asset management at Abra, confirmed the acquisition in an interview. She stated that this purchase would enhance Abra’s existing range of spot and DeFi services for new clients. Depending on market demand, Abra may consider making some of these trusts publicly traded.
Regulatory Settlement and Compliance
In conjunction with the acquisition, Abra has settled with financial regulators from 25 U.S. states for operating without the proper licenses. As part of the settlement, Abra is required to return $82.1 million worth of cryptocurrencies to U.S. customers. Abra had already ceased offering services in the country last year. The Conference of State Bank Supervisors (CSBS) announced that Abra will no longer accept cryptocurrency from U.S. customers for its Abra Trade accounts and will halt all buying and trading activities. Regulators in Washington, Texas, Georgia, and Ohio decided against imposing monetary penalties to ensure full reimbursement to customers.
Past Regulatory Issues
In 2023, Texas state regulators accused Abra of insolvency and securities fraud. The Texas State Securities Board alleged that Abra misled investors through the sale of two crypto interest account products and issued a cease order against the exchange. Abra settled with Texas regulators in January 2024, agreeing to wind down operations and return funds to investors. Abra’s founder, Bill Barhydt, maintained that the platform never restricted U.S. withdrawals and is committed to winding down retail operations within the U.S.
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Leadership Changes and Future Plans
Leah Wald, a Valkyrie co-founder and former chief executive, resigned from the company last month. Valkyrie did not immediately respond to requests for comment on the sale of its crypto trusts to Abra.
Abra’s acquisition of Valkyrie’s cryptocurrency trusts is seen as a strategic move to expand its offerings and strengthen its position in the market. As the platform navigates regulatory challenges and compliance issues, it remains focused on enhancing its services and exploring new opportunities for growth.
Abra’s acquisition of Valkyrie Investments’ cryptocurrency trusts marks a notable development in the crypto trading landscape. While regulatory challenges continue to shape the industry’s trajectory, Abra’s commitment to compliance and strategic expansion positions it for future growth and success.
