Abra Acquires Valkyrie Cryptocurrency Trusts Amid Regulatory Settlement
Crypto trading platform Abra has acquired several private cryptocurrency trusts from Valkyrie Investments, just before settling with 25 U.S. state financial regulators for operating without appropriate licenses.
In May, Abra Capital Management LP took over several active trusts from Valkyrie, including the Tron and Zilliqa trusts, according to Marissa Kim, Abra’s head of asset management, in an emailed response to Bloomberg News on Friday. The acquisition also included several trusts yet to be launched.
According to a filing by Valkyrie with the U.S. Securities and Exchange Commission, the Zilliqa Trust had sold $21.3 million in assets as of October last year, while the Tron Trust had sold $50 million in assets as of September 2022. The terms of the deal were not disclosed.
“This acquisition will provide ACM with a way to expand its current offering of spot and DeFi products to a new audience of investors,” Kim stated”. She added that Abra might consider making some of the trusts publicly traded in the future, “depending on market appetite“.
In June, Abra settled with a working group of regulators over claims that it had operated without the necessary state licenses to handle crypto asset activities. As part of the settlement, Abra will return $82.1 million in crypto assets to U.S. customers and had already halted offering services in the country last year. Abra Capital Management is an SEC-registered investment advisor, the firm stated.
In June 2023, Abra was accused of securities fraud by a Texas regulator. The Texas State Securities Board alleged that Abra misled investors through the sales of two crypto interest account products and claimed that Abra had been insolvent or nearly insolvent. Texas was among the states included in the settlements last month.
Throughout 2024, Valkyrie has steadily divested portions of its business, including selling its primary exchange-traded funds business to CoinShares International Ltd. earlier this year. Valkyrie’s private trusts business included funds tied to cryptocurrencies such as Algorand, Avalanche, BitTorrent, Dash, Polkadot, and Bitcoin, according to past SEC filings.
Leah Wald, Valkyrie’s co-founder and then-chief executive, resigned from the company last month.
