In a recent turn of events, we are informed of the news of the crypto investment and management platform Abra having acquired some of the crypto trusts from the digital asset management firm Valkyrie.
The acquisition was confirmed by the head of asset management at Abra Capital Management LP.
Let us look more closely at the details of the events in the sections below.
What are the details available about Abra Capital’s acquisition of crypto trusts from Valkyrie?
Abra Capital Management has been under a lot of fire lately for its recent settlement with over 25 US states for its operations without the necessary licenses. The settlement was a heavy blow to the reputation of Abra Investments.
As we dealt with the aftermath of this news we have recently been presented with the revelation that Abra Capital Management, one of the significant players in the cryptocurrency industry had apparently bought the rights to some of the active trusts managed by Valkyrie in May.
The news was revealed in an email response that Marissa Kim, the head of asset management at Abra had given to Bloomberg News following their doubts on such a transaction.
The two trusts in question are Tron and Zilliq. These were some of the highest capping funds in Valkyrie at the time with over $21.3 million of assets sold by Ziliqa and over $50 million in assets sold by Tron.
Even though the further details of the transaction were not made clear by the group it was added that the deal was to allow Abra Capital to expand its network to offer spot and Decentralized finance products to new investors in the future.
They also mentioned the plans to list some of the funds to be traded in public in the future.
It is however of no hope to investors that Abra will be able to able to fulfill its promises to its investors due to the scrutiny from the numerous State regulators accusing it of fraud. We will look at some of the allegations that were posed against Abra in the section below.
Abra and its legal troubles
The Texas legislators accused the Abra Capital Management group of insolvency and security fraud allegations in 2023. The case specified that Abra had misled investors about the sale of two of the crypto account-related products that they offered to its U.S.-based customers.
The legislators then issued a cease and desist order against the exchange following which Abra had to settle with them a year later in January 2024 while agreeing to halt its operations and return the funds to its investors. An amount of $82.1 million was decided as a refund for the allegation to its U.S. customers.
The Founder of Abra, Bill Barhydt later tried to clear up the tension by saying that the platform had never restricted withdrawals from the United States and was committed to cutting its relationship with Valkyrie.
The company has since been dumping huge portions of its business in 2024, which included its primary exchange-traded funds business. Their exchange-traded funds section was however acquired by CoinShares International Ltd. earlier this year.
This does not end the story as the group was reported to have multiple ties to cryptocurrencies like Avalanche, Algorand, BitTorrent, Dash, Bitcoin, and Polkat all of which were linked to their private trust business.
Following this, their co-founder and CEO Leah Wald, tendered his resignation just last month. Not much is known about how the company will respond and act to these accusations and the future is uncertain for the investment management group.
Let us now look at what takeaways we can get from having gone through the mentioned details.
Final Thoughts
Accusations such as the ones that were launched against Abra have become quite commonplace in the world of institutional investment companies.
The events described in the article show how a single accusation could just be enough to tarnish the reputation of a giant company and all those who had links to it.
This example will have to work as a warning to all those institutions that engage in such fraudulent activities. The particular case of Abra should also be used as a cautionary tale for all investors before they consider investing in such institutions.
