Abra Acquires Valkyrie Funds Between Regulatory Settlements

Crypto exchange Abra, who launched ‘Abra Treasury’ earlier this month, has expanded its asset offerings by acquiring several funds from Valkyrie Investments. This move follows Abra’s recent settlement with 25 U.S. state regulators. Bloomberg reports that the acquisition includes Valkyrie’s Tron and Zilliqa trusts, which collectively have sold around $71 million in assets to investors.

Marissa Kim, Abra’s head of asset management, told Bloomberg, “This acquisition will provide [Abra] with a way to expand its current offering of spot and DeFi (decentralized finance) products to a new audience of investors.” The deal also includes Valkyrie funds that have yet to be launched, enhancing Abra’s product range.

Regulatory Hurdles and Settlements

In 2023, the State of Texas accused Abra of misleading investors through the sales of two interest-bearing crypto products. Additionally, allegations surfaced that the exchange was insolvent or nearly insolvent. In June, Abra reached a settlement with a coalition of states, including Arkansas, Connecticut, Georgia, Ohio, Oregon, Texas, Vermont, and Washington State.

The Conference of State Bank Supervisors (CSBS) press release detailed that Abra was operating without the necessary licenses. Consequently, Abra was fined $250,000 per jurisdiction and agreed to reimburse customers up to $82.1 million worth of crypto assets.

CSBS Chair Charlie Clark emphasized the seriousness of regulatory compliance, stating, “State financial regulators take their role to protect consumers and prevent unlicensed activity seriously. Companies that do not operate within the bounds of state laws will be held accountable.”

Earlier this year, Valkyrie Funds, a digital asset manager, was acquired by European digital investment group CoinShares. This acquisition came after the U.S. Securities and Exchange Commission (SEC) approved CoinShares’ bid to create a spot market Bitcoin (BTC) exchange-traded fund (ETF).

The acquisition of Valkyrie by Abra marks a significant step in the crypto exchange’s strategy to broaden its market presence and diversify its product offerings. By integrating Valkyrie’s funds, Abra aims to attract a wider range of investors and strengthen its position in the competitive crypto market.