Ben Strack

Crypto platform Abra has brought on a venture capitalist veteran to be co-chairman of its board of directors.&nbsp;



Shervin Pishevar will work directly with <a href="https://blockworks.co/tag/abra">Abra</a> CEO Bill Barhydt — set to become the other co-chairman — on “strategic initiatives,” the company revealed Tuesday.



Pishevar co-founded Sherpa Capital (now known as Acme Capital), which has invested in Uber, Airbnb, SpaceX and Robinhood, among others. He was also a strategic adviser to Uber’s board of directors and company founder Travis Kalanick.&nbsp;



“Shervin is not only one of the most successful venture capitalists in Silicon Valley but is also a true believer in the power of Bitcoin and crypto to create a future of financial services that is digital, open and borderless,” Barhydt said in a statement.



Abra planned to launch the <a href="https://blockworks.co/news/abra-launching-first-us-regulated-crypto-bank">first regulated crypto bank</a> in the US in 2022 before <a href="https://blockworks.co/news/abra-shakes-up-senior-staff-crypto-push">making personnel cuts</a> after FTX collapsed. It later received a cease and desist order from the Texas State Securities Board — ultimately reaching an agreement with regulators to allow users to withdraw funds from the platform.&nbsp;



Read more: <a href="https://blockworks.co/news/abra-settlement-customer-funds-withdrawal">Abra will open customer withdrawals following Texas settlement&nbsp;</a>



Pishevar noted he is set to help the team “realize their vision of bringing banking, investing and lending into the 21st century.



“We have many exciting announcements to come that systemically change how the world works,” he added.&nbsp;



In other news, Platonic appointed Altin Hoxha as its chief technology officer. The company seeks to help financial institutions participate in digitized common market infrastructure on a decentralized platform.



Hoxha was previously head of digital assets platform engineering for Citi Innovation Labs — leading the unified standard for digital asset use cases across <a href="https://blockworks.co/tag/citi">Citi</a>’s institutional clients.&nbsp;



“Altin’s expertise will be invaluable as we continue to develop our decentralized tokenization platform and expand the possibilities in finance,” Platonic CEO Violet Abtahi said in a statement.&nbsp;



Read more: <a href="https://blockworks.co/news/citibank-explores-tokenization-wisdomtree">Citi the latest TradFi player to test out asset tokenization</a>



And in case you missed it last week, <a href="https://blockworks.co/tag/tether">Tether</a> hired Jesse Spiro as its head of government affairs.&nbsp;



Spiro joins the stablecoin issuer from PayPal, where he led regulatory relations within the company’s blockchain and digital currencies division. Prior to that, he was a chief government affairs officer at blockchain analytics firm Chainalysis.



“The ever-evolving legislative and regulatory landscape will continue to require strong collaboration between the public and private sectors,” he said.



Also last week, blockchain-powered real estate platform Propy said former SEC Commissioner Michael Piwowar would “play an integral role in guiding the team to navigate regulatory heterogeneity in key markets.”



“Real estate is a cornerstone of the global economy,” Piwowar said in a statement. “Leveraging cutting-edge technologies like blockchain and AI are essential to overcoming the many challenges the industry faces.”



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Crypto Hiring: VC vet joins Abra board; Citi exec jumps ship

Felix Jauvin

Casey Wagner

Today, enjoy the On the Margin newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox.&nbsp;<a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the On the Margin newsletter</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Welcome to the On the Margin Newsletter, brought to you by Ben Strack, Casey Wagner and Felix Jauvin. Here’s what you’ll find in today’s edition:



<ul class="wp-block-list">
<li>Felix breaks down charts from the latest OTM podcast weekly roundup, which you can listen to <a href="https://blockworks.co/podcast/onthemargin/5c8d3bfc-61bd-11ef-a799-4b2875ef46f6">here</a>.&nbsp;</li>



<li>Securities regulators went after another crypto lending platform, but this company seems to have come out on top.&nbsp;</li>



<li>A look at the crypto asset manager that has revealed two acquisitions a week apart.</li>
</ul>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">Rounding out the roundup</h2>



For those who missed this week’s On the Margin podcast roundup, we’re once again rounding out the episode by outlining some of the key charts and insights discussed.



Enjoy!



<h3 class="wp-block-heading">The Jackson pivot</h3>



The talk of the week was Fed Chair Jerome Powell’s speech at Jackson Hole. This tweet from the WSJ’s Nick Timiraos best summed up the key takeaways:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe_WQYjaGTmdsbhovfnfAZYQopDlvkplVhfOosOLHWmjQqAuQAvrdEtzg_2DAumahiMCYtL6xXGX1l3o0Y0Mqenxky8N9ibYkC4LsS_gVS5Zil-AKtXEC3ND7RsvaR_z8T2ePGCdzDTZSRbTi97Qch4VAO4?key=vsk7GRwVB9DYpAHKkBTMOw" alt=""/></figure>



What this means is Powell has struck the Fed put and anchored it to the labor market. By mentioning that the Fed does not welcome any further cooling in labor market conditions, he is making it explicit that any further weakening would be matched with further easing of monetary policy.



What Powell did not do, however, was provide explicit guidance on the size of the cut in September. As it stands today, markets are pricing in an implied probability of 34.5% regarding a 50 basis point cut:<img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeUw7VcaPDT_WTbea8eo0zZqlOcNk6jGLjvbLZnOkGNxeBGOkG4R5pqwnwrotkVrukuV1J25IQl1hHJGhYqhmm-Nttw62VvPzDudUG2zbO3MHxkLtNa4T4SAX_ltMCDJndHgPY9fY0b7F8PlzeO2-l4MfPc?key=vsk7GRwVB9DYpAHKkBTMOw" width="624" height="240">



<h3 class="wp-block-heading">Plaza Accord 2.0?</h3>



A couple of weeks ago, it looked like the Asia Dollar Index was about to break out amidst a dovish tilt to the US dollar.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXehkWRN-XjYyE6KZQVJSL3DZU6aVig2i3R7lEgIPGN2eP2U8aWM3YtZOGomVGzcQ2gTnM1nEbemkh3k3P-wGpuVxjMqYO6NyPbuDeAvmZIZ4cmfjPLOb7z8M0f9gK4ml6FJfFHjZ7Lk-fW7bL_BtTW89Wo3?key=vsk7GRwVB9DYpAHKkBTMOw" alt=""/></figure>



USDJPY was also causing major shake-ups in the FX landscape as the yen strengthened after the Bank of Japan’s first rate hike in years.



Suddenly, however, the FX volume diminished and the margin calls stopped.&nbsp;



One theory, as proposed by Michael Howell of Crossborder Capital (who just so happens to be appearing on the On the Margin podcast tomorrow), is that an “in the shadows” agreement was struck between policymakers to increase US dollar liquidity and get the BoJ to ease its hawkish rhetoric.&nbsp;



As surmised in the chart below, this could well pave the way for a simple liquidity situation to the last major FX agreement — the Plaza Accord:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe5-GaI54qYNlGfzWGGZterfI5HFzy_MnxZ88m2e_8x6lnrIWgFTkNFbKLK_9wDeanW5GtirAMRqAWCq4lXy-OeY6iNvbUgp7eQU5vbZxmOXg-SexjMpm51CKmtho8CDa2pJiy7p1FOuo6FoZv-0fY4DEoB?key=vsk7GRwVB9DYpAHKkBTMOw" alt=""/></figure>



<h3 class="wp-block-heading">Credit spreads aren’t stressing</h3>



For weeks now we’ve been banging the drum that most of the <a href="https://blockworks.co/news/crypto-stocks-btc-lower-economic-data">recent market volatility</a> is not fundamental-based, as credit spreads were not showing the strain they would during such situations. As seen in the JPM high yield index below, things remain muted:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcljfsys8D3ItxVLBp2fbs00R0sggVgZKLoS7_AzJU9wATQjk46yaAD2m92b-JLhKOCI3cGMON8oR2fi1oevYmEMrsxjqPpSVDWusrOnUFovfywlPXvnXotfgdLoVM1faOhQR1r4YUuTR_Jk9rrrmYsIvqn?key=vsk7GRwVB9DYpAHKkBTMOw" alt=""/></figure>



As long as credit spreads remain contained, the fears of a looming recession and continued market downturn should be faded.



That’s it for the rounding out of the roundup. Don’t miss the show airing <a href="https://blockworks.co/podcast/onthemargin">every Saturday morning</a>.



— Felix Jauvin



<h3 class="wp-block-heading">1/50 of one bitcoin&nbsp;</h3>



The size of the new micro-bitcoin futures product CME Group plans to launch at the end of September, pending regulatory approval. Dubbed Bitcoin Friday Futures, or BFF, the contracts would settle at 4 pm ET every Friday.&nbsp;



New BFF contracts are set to be listed on Thursday at 6 pm ET, and market participants would be able to trade them on the nearest two Fridays at any time, CME said Tuesday.&nbsp;



<h2 class="wp-block-heading">The SEC is not a fan of ‘Earn’ anything&nbsp;</h2>



Crypto platform Abra has settled charges with the SEC relating to its Abra Earn product, regulators said Monday.&nbsp;



In what should come as a surprise to no one, the SEC claimed Abra Earn — a platform that came with big returns for customers willing to lend their assets — was an unregistered security. Regulators noted that at its peak, Abra Earn held around $600 million in assets. Roughly $500 million of that total was from US investors.&nbsp;



We know the SEC is not a fan of these lending platforms, especially those <a href="https://blockworks.co/news/gemini-moves-to-dismiss-sec-lawsuit">with “Earn” in the name</a>.&nbsp;



Securities regulators in <a href="https://www.sec.gov/newsroom/press-releases/2024-37">March</a> announced a $21 million settlement with Genesis over its Gemini Earn product. The state of New York also <a href="https://blockworks.co/news/nyag-wants-3-billion-gemini-dcg">took action</a> against Genesis and Gemini, revealing in <a href="https://ag.ny.gov/press-release/2024/attorney-general-james-recovers-50-million-crypto-firm-gemini-defrauded">June</a> it had recovered $50 million for what Attorney General Letitia James’s office referred to as “defrauded” investors.&nbsp;



Crypto exchange Kraken last year <a href="https://www.sec.gov/newsroom/press-releases/2023-25">settled charges with the SEC</a> and agreed to discontinue its staking-as-a-service program, which regulators alleged qualified as unregistered investment contracts.&nbsp;



The terms of Abra’s settlement are not yet fully determined. The SEC said Monday that Abra has not admitted or denied the allegations (typical of these settlements) and has agreed “to an injunction prohibiting it from violating the registration provisions of the Securities Act and the Investment Company Act.”&nbsp;



This is regulator-speak for “Abra wound down Earn,” which CEO Bill Barhydt confirmed in an <a href="https://x.com/billbarX/status/1828154151559405776">X</a> post Monday. He added that customers of Abra Private (its SEC-registered investment advisor arm, available to high-net-worth investors and family offices) can still access yield and staking services. 



A spokesperson for Abra told Blockworks the following: 



“Plutus Lending LLC (“PLL”), a subsidiary of Abra, has agreed to settle an action brought by the SEC regarding Abra Earn, a service that was discontinued in 2022. Without admission of wrongdoing, PLL agrees to continue to comply with securities laws. No consumers were harmed at all by the settlement or wind down of Abra Earn.  All assets for US Earn customers including accrued interest were transferred to their Abra Trade accounts in 2023. Abra continues to operate in the USA via Abra Capital Management, an SEC-registered investment advisor.”



A DC federal court will determine the civil penalties owed, which will likely take months.&nbsp;



All in all, it’s not a terrible outcome. Barhydt even said so himself, although he questioned whether the investigation and charges were really a “positive use of taxpayer funds.”&nbsp;



Still, we imagine Abra saved a lot of money and time by opting not to fight this in court (which likely wouldn’t have ended in its favor anyway). Plus, it seems its retail business is alive and well outside of the US, at least for now.&nbsp;



— Casey Wagner



<h2 class="wp-block-heading">Bitwise has come to play</h2>



Bitwise has revealed its second acquisition of the month as part of an apparent push to maintain its solid position in the crypto ETF arena.&nbsp;



About a week after <a href="https://blockworks.co/news/bitwise-europe-acquisition-crypto-etps">acquiring London-based ETC Group</a> (complete with its nine Europe-listed crypto ETPs), the firm said Tuesday it would take over the assets (currently worth about $120 million) within the Osprey Bitcoin Trust.



For Osprey shareholders, this deal “will lower costs and increase liquidity while providing continuity to their investment,” Bitwise CEO Hunter Horsley told Blockworks.&nbsp;



Bitwise has name recognition in the crypto fund space, sure. It launched the Bitwise 10 Crypto Index Fund in 2017 — a product that manages more than $900 million in assets.



But when launching its US spot bitcoin and ether ETFs in January and July, respectively, the firm started going up against the biggest of the big. We’re looking at you, BlackRock and Fidelity.&nbsp;



Even before the milestone US spot bitcoin ETF launches, Bitwise came out <a href="https://blockworks.co/news/bitwise-ad-marketing-bitcoin-etfs">swinging with ads </a>featuring The Most Interesting Man in the World. In the months since, Bitwise has held its own in the fight for crypto ETF assets.&nbsp;



Net inflows into the Bitwise Bitcoin ETF (BITB), at about $2 billion since launch, rank fourth — behind BlackRock, Fidelity and Ark Invest/21Shares. Bitwise trails only the former two companies when it comes to net money entering its spot ETH offering, reeling in $312 million during the products’ first month on the market.&nbsp;



Grayscale is of course another one of Bitwise’s crypto-centric ETF competitors, particularly as its newer <a href="https://blockworks.co/news/grayscales-spin-off-etf-launches-crypto-outlook">“Mini” BTC and ETH trusts gain traction</a>.



Whereas Bitwise buying ETC Group was a bid to boost its European presence, the purchase of Osprey assets is set to bolster the US-listed BITB’s current $2.4 billion asset base. The deal is expected to close later this year.



Such deals mark a continuation of M&amp;A within the crypto ETP realm. As you may recall, Europe-focused CoinShares <a href="https://blockworks.co/news/coinshares-buys-valkyrie-fund-business">acquired Valkyrie’s US-centric ETF business</a> in March.&nbsp;



Whether Bitwise and CoinShares perpetuate this trend so as to grow even larger — or others make moves to become a top player in the space — remains to be seen.&nbsp;&nbsp;



“We have a lot to do in the US and Europe,” Horsley said. “But we will always be open to new opportunities where they make sense.”&nbsp;



— Ben Strack&nbsp;



<h2 class="wp-block-heading">Bulletin Board</h2>



<ul class="wp-block-list">
<li>CF Benchmarks has licensed out the Bitcoin Reference Rate New York variant (BRRNY) to Nasdaq for the exchange’s proposed cash-settled bitcoin options. The launch of such options — subject to SEC approval — would “build upon the hugely successful BTC futures and options contracts offered by CME,” CF Benchmarks CEO Sui Chung said in a Tuesday statement.&nbsp;&nbsp;</li>



<li>Hilbert Capital has partnered with Xapo Bank to create a BTC-denominated hedge fund. Set to launch next month, the fund is expected to receive roughly $200 million from Xapo Bank and other investors. It will offer professional investors a chance to generate returns in BTC from “institutional-grade structured credit arrangements,” the companies said Tuesday.&nbsp;</li>



<li>US spot bitcoin ETFs on Monday notched collective net inflows (amounting to $203 million) for an eighth straight day, according to Farside Investors <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">data</a>. On the flip side, Monday marked the eighth straight day of net <a href="https://farside.co.uk/ethereum-etf-flow-all-data/">outflows</a> ($13 million) for the spot ether funds trading in the US, showing a demand divergence for the two types of products.</li>
</ul>



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Jerome Powell is ‘dovish across the board’: Unpacking the Jackson pivot

Katherine Ross

Abra and securities regulators in Texas reached an agreement, allowing users to withdraw funds from the platform.&nbsp;



The agreement in principle requires Abra to send a check “or secure bank instrument” to clients who have holdings of $10 or more in assets on the crypto platform.&nbsp;



The Texas Securities Board said that Abra, at the time that Texas took action against the company, held crypto worth around $13.6 million for around 12,000 customers.&nbsp;



Read more: <a href="https://blockworks.co/news/abra-william-barhydt-texas-cease-desist">Abra, William Barhydt named in Texas State Securities Board cease and desist</a>



“Existing securities laws are well equipped to protect investors purchasing traditional products such as stocks or bonds as well as new and innovative securities tied to digital assets and evolving technologies,” Commissioner Travis J. Iles <a href="https://ssb.texas.gov/sites/default/files/2024-01/Abra_Release_Final_0.pdf">said</a>.



The announcement said that Abra and Barhydt have 30 days from the announcement of the settlement in principle to “complete its obligations.”



Any assets that are left following Abra’s notices will be converted to fiat and “directed to remaining Texas investors.”



Additionally, the <a href="https://ssb.texas.gov/sites/default/files/2024-01/TX%20Abra%20Term%20Sheet_Final.pdf">terms</a> of the settlement in principle require Barhydt to hire a chief compliance officer for “any entity he controls or is a principal of that is in the business of providing investment advice or issuing or offering securities.”



Both <a href="https://blockworks.co/tag/abra">Abra</a> and CEO William Barhydt received an emergency cease and desist letter from the Texas State Securities Board back in June.&nbsp;



The regulator accused the crypto platform of making “offers of investments in Abra Earn in Texas containing statements that were materially misleading or otherwise likely to deceive the public.” 



Abra, in 2022, planned to launch as the <a href="https://blockworks.co/news/abra-launching-first-us-regulated-crypto-bank">first regulated crypto bank</a> in the US. However, it made <a href="https://blockworks.co/news/abra-shakes-up-senior-staff-crypto-push">personnel cuts</a> throughout the company after FTX collapsed and later received the cease and desist order.



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Abra will open customer withdrawals following Texas settlement 

The Texas State Securities Board issued an emergency cease and desist against Plutus Financial, Plutus Lending, Abra Boost — doing business as Abra — and CEO William Barhydt.



The cease and desist ordered the named parties above from “offering securities in Texas through an offer containing a statement that is materially misleading or otherwise likely to deceive the public&#8221; as well as stopping them, &#8220;from engaging in any fraud in connection with the offer for sale of any security in Texas.&#8221;



The securities commissioner is <a href="https://www.ssb.texas.gov/sites/default/files/2023-06/ENF_23_CDO_1873_NOH_Actions.pdf">claiming</a> that Barhydt and Abra “made offers of investments in Abra Earn in Texas containing statements that were materially misleading or otherwise likely to deceive the public.”



An investigation into Abra Earn had started in 2022, with the letter saying that “Abra announced it would cease selling investments in Abra Earn in October 2022.”



However, in October 2022, Barhydt, Plutus Financial, Plutus Lending and Abra Boost “began offering and selling investments in Abra Boost, a digital asset depository account, to accredited and institutional investors in the United States.”



In March 2023, Barhydt was interviewed by state securities regulators, when “parties collectively operating as Abra were collectively insolvent or nearly insolvent.”



The cease and desist claims that Plutus Financial, Plutus Lending and Barhydt violated the Securities Act and “engaged in fraud.”



Abra, back in September of 2022, had <a href="https://blockworks.co/news/abra-launching-first-us-regulated-crypto-bank">plans to launch as the first regulated crypto bank</a> in the US. It had planned to launch in the US in the first quarter of 2023.&nbsp;



However, last December, Abra made <a href="https://blockworks.co/news/abra-shakes-up-senior-staff-crypto-push">personnel cuts across executives and other divisions</a> following the collapse of FTX and a source told Blockworks that it had become difficult to “raise new money and get new capital into the company.”



Abra and Barhydt did not immediately respond to requests for comment.&nbsp;



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Abra, William Barhydt named in Texas State Securities Board cease and desist

Michael Bodley

Abra is reshuffling several of its business lines as the company <a href="https://blockworks.co/news/abra-launching-first-us-regulated-crypto-bank" target="_blank" rel="noreferrer noopener">with aspirations to become the US’ first regulated crypto bank</a> has taken a hard look at cost-cutting as a buffer against the bear market, according to three sources familiar with the matter.



The measures undertaken by Abra’s top executives include a relatively measured number of personnel cuts across the firm’s sales, trading and research divisions, sources said. Still, they’re significant in the sense that they include senior personnel departures.&nbsp;



Michael Maizels, Abra’s head of research, was among those laid off within the last couple of months, as was Robin Malik, a head of over the counter (OTC) trading at the firm. There’s no indication any of the terminations were related to performances, sources said. The moves appear to be related to difficult crypto market conditions and the need to cut costs accordingly.&nbsp;



Maizels and Malik both declined to comment. Sources were granted anonymity to discuss sensitive business dealings.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“[The layoffs were] more of a cost-efficiency cutoff, where people weren’t getting business, for whom there was no work to be done — not performance-related at all,” a source said. 
</blockquote>



Generally, sales professionals are among the first to go when a crypto company makes the call to conduct layoffs in a bear market. That’s typically because current and potential customers tend to dial down their digital asset activities in down markets, so sales people have far fewer calls to make.



<h3 class="wp-block-heading">Abra wanted a chief investment officer&nbsp;&nbsp;</h3>



CEO Bill Barhydt and Abra’s senior executives in December installed Robert Wallden as the firm’s head of institutional asset management. Though Wallden has a solid resume —&nbsp;including stints at BNP Paribas, Deutsche Bank and Gelber Group — he also has a background in sales, two sources said.&nbsp;



The New York-based Wallden, who most recently held the title of director of credit and trading platforms origination for Abra, appears to have some trading experience, per his LinkedIn. But both sources dubbed his selection as a curious pick, given his prior sales experience. Wallden did not reply to a request for comment.



Abra made a first-time <a href="https://blockworks.co/news/crypto-startup-abra-enters-institutional-asset-management-business%5C" target="_blank" rel="noreferrer noopener">push</a> into institutional asset management early in 2022, building off what had been one-off trading strategies for individual clients. The general idea at the time was to port opportunities to deliver crypto yield that had been developed on the credit side of the business to the emerging trading and money-running side.



The more recent moves, one source said, may stem from Abra’s plan to put in place what would have been a newly created position: chief investment officer. That role, for which interviews have been conducted, would have created a new structure designed to connect Abra’s trading, credit and asset management divisions. The heads of each would report to the chief investment officer, who would be tasked with corresponding oversight and determining how capital is allocated to each unit.



Such a setup would have simplified and consolidated internal communication, the source said.&nbsp;



That effort appears to have stalled internally, possibly due to the expense of bringing on a chief investment officer in the current market, the source added.



Barhydt declined to comment on individual employees. He did not return an additional request for comment regarding a prospective chief investment officer.&nbsp;



Regardless, such a hire would represent a change in how Abra has historically structured its hierarchy, according to two sources.&nbsp;



“There is definitely some restructuring going on,” one of the sources said.



Barhydt said his firm has expanded trading operations over the course of the fourth quarter to include over the counter (OTC) crypto capabilities, structured products and derivatives.&nbsp;



“Our trading business is doing great,” Barhydt said in a text message.



Abra “did layoffs earlier in the year as a purely cutting measure,” Barhydt said. Sources said the sales staffers were laid off at some point earlier in 2022, with the other cuts occurring recently.&nbsp;



<h3 class="wp-block-heading">Barhydt’s big crypto bank ambitions&nbsp;</h3>



The push for a chief investment officer, if there is still one in the works, started gaining steam around the same time Barhydt <a href="https://www.abra.com/blog/abra-bank-and-abra-boost/" target="_blank" rel="noreferrer noopener">announced</a> Abra’s ambitions to become a bank in September, one source said. The plan is to create two entities: Abra Bank in the US and Abra International, designed to serve non-US customers.



Abra at the time dubbed the US component of the effort as what “will be the first regulated bank in the US that will enable our customers in the US to deposit and bank with digital assets, and access global fiat on and off ramps.”



“A lot of it had to do with the way the economy is right now and how difficult it is to raise new money and get new capital into the company,” the source said. “Priorities have been realigned.”



Abra is known among industry participants as a credit specialist with a roster of institutional clients. Barhydt told Blockworks the company has “won many institutional deals in the current quarter,” adding that the trading division has “grown significantly this quarter.”



And the company doesn’t seem to have been stung especially hard by the demise of Sam Bankman-Fried’s Alameda Research and FTX. In a Nov. 10 <a href="https://www.abra.com/blog/a-message-from-our-ceo-bill-barhydt-regarding-ftx/" target="_blank" rel="noreferrer noopener">statement</a>, Barhydt said Abra&#8217;s “retail, lending and private crypto wealth management businesses don&#8217;t have any exposure to Alameda and have no material exposure to FTX or the FTT token.”



“Abra did use FTX for some trading activities,” Barhydt said at the time. “We moved most assets off of FTX and hedged our exposure on those that remain.”



The chief executive attributed the firm’s ability to “manage risk so effectively” to stringent risk management practices when it comes to lending.&nbsp;



“Every lender suffers losses,” Barhydt said then. “The key is to practice sound risk management to minimize the impact of losses while maintaining a reasonable level of profitability.”



Still, three sources said it’s clear there has been a top-down push to reevaluate how Abra approaches trading.&nbsp;



“All of this has sort of cascaded,” one of the sources said. “When you line up the chess pieces, it all makes sense that the whole point was to overhaul trading. Would this have happened if the industry hadn’t reeled?…That I don&#8217;t know.”



All three sources referred to Abra undertaking a “restructuring.”



“Abra hasn’t restructured anything,” Barhydt said. 



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Abra Shakes Up Senior Staff as Crypto Bank Plans Near, Sources Say

Jack Kubinec

<div id="highlights-block_631f818f93ea8" class="highlights">
 <ul>
 <li>Abra Bank will launch in the US during Q1 2023, with an international bank to follow</li>
 <li>“As a regulated licensed bank, it&#8217;s no longer my opinion [that matters] on transparency and public disclosures,” Abra’s CEO told Blockworks</li>
 </ul>
 
</div>



Abra, the crypto exchange and lending platform, is launching the first US regulated crypto bank, the company said Monday.



The move, in the eyes of industry participants, is a bullish indicator that somewhat shakes off the sector’s bear market woes — plus the pending trips of crypto lenders <a href="https://cms.blockworks.co/7-critical-events-in-the-celsius-bankruptcy-case/" target="_blank" rel="noreferrer noopener">Celsius</a> and <a href="https://cms.blockworks.co/voyager-to-liquidate-assets-at-auction/" target="_blank" rel="noreferrer noopener">Voyager</a> to bankruptcy court. 



Abra’s move positions the company in what has been a yearslong arms race within crypto to create the first US regulated interest-bearing crypto account — offering consumers crypto exposures with legal safeguards.



All customer deposits into Abra Bank are set to be converted into stablecoins that accrue interest similarly to traditional banks. The bank will allow customers to transfer funds into over 100 cryptocurrencies. Abra also <a href="https://about.americanexpress.com/newsroom/press-releases/news-details/2022/Abra-announces-Abra-Crypto-Card-on-the-American-Express-Network/default.aspx" target="_blank" rel="noreferrer noopener">partnered</a> with American Express in June to launch a crypto credit card.



Abra Bank’s services — asset custody, lending and staking — are already offered by a variety of other crypto firms, but Abra Bank’s regulatory guardrails make it stand out from competitors, according to Abra CEO Bill Barhydt.



“As a regulated licensed bank, it&#8217;s no longer my opinion on transparency and public disclosures. The banking laws take over and require disclosures on assets, liabilities and risk management processes,” Barhydt told Blockworks.



Abra’s maneuver comes amid Chapter 11 bankruptcy proceedings for Celsius and Voyager Digital, two companies that operated as ersatz banks offering high yields before going belly-up. Voyager Digital infamously <a href="https://cms.blockworks.co/fdic-slaps-bankrupt-lender-voyager-over-deposit-insurance-claims/" target="_blank" rel="noreferrer noopener">misled</a> customers to believe the crypto lender was FDIC insured. Abra is looking to make good on that premise.



In the US, insured banks <a href="https://www.federalreserve.gov/faqs/banking_12779.htm" target="_blank" rel="noreferrer noopener">must</a> prove to regulators they have enough assets available to support their risk profile. Abra has completed this process and plans to launch sometime before the second quarter of 2023.



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Abra Launching First US Regulated Crypto Bank

<div id="highlights-block_62bf2533b47ae" class="highlights">
 <ul>
 <li>Metamask operations lead set to join the BitDAO ecosystem</li>
 <li>Abra and Bitpanda cut jobs while Kraken still on the hunt for talent</li>
 </ul>
 
</div>



The global head of business development for <a href="https://www.bloomberg.com/quote/9869818Z:US" target="_blank" rel="noreferrer noopener">Citadel Securities</a> is set to lead the company’s joint venture focused on increasing investor access to crypto, Bloomberg News <a href="https://www.bloomberg.com/news/articles/2022-06-28/citadel-securities-nazarali-leaves-to-run-firm-s-crypto-venture" target="_blank" rel="noreferrer noopener">reported</a>.



Citadel Securities and Virtu Financial were in the process of building a cryptocurrency trading platform, a source familiar with the matter <a href="https://cms.blockworks.co/citadel-securities-virtu-financial-building-crypto-trading-platform/" target="_blank" rel="noreferrer noopener">told Blockworks last month</a>. Jamil Nazarali is reportedly expected to become CEO of the platform.



Citadel Securities did not immediately return a request for comment.&nbsp;



Web3 gaming company Immutable hired a former global head of product design for payments at Facebook to lead the protocol’s product design.



Henry Cho will help the company build an API-only user experience that enables mainstream developers to build simply.&nbsp;



“Immutable will continue hiring the best talent across the globe to continue building our vision of enabling the next billion players to truly own their in-game items,” Immutable co-founder Robbie Ferguson said in a Twitter post.



Andrei Serjantov joined crypto startup Nym as its chief financial officer. He is set to develop the company’s multi-purpose mixnet that helps enable privacy for any application, as well as the underlying finances of its NYM token.



Serjantov joins Nym from French banking group BNP Paribas, where he worked for 16 years. He was most recently the company’s head of electronic credit trading and head of flow credit quantitative research.



“As the bear market rages on, all eyes are on crypto to prove its worth,” Serjantov said in a statement. “Skeptics assume people join crypto to make a quick buck and scam the typical user, but those working through the bear market have something more to prove.”



The former operations lead for self custodial wallet MetaMask is set to join the BitDAO ecosystem to accelerate the adoption of Web3 gaming.



Jacob Cantele is now head of product strategy for BitDAO’s <a href="https://www.globenewswire.com/Tracker?data=RahCDqBPLaBstxmOiHGQa1CDZiEMesp8Rq0nyXTHCEpKTcTSFrZNgyb-TjJRHcgYqG_b2Y9OQw4S5FdLSsh8dg==" target="_blank" rel="noreferrer noopener">Windranger Labs</a> and head of product for the <a href="https://www.globenewswire.com/Tracker?data=8VFB9yNCFXlRwlXlNa_pyfLRfykSOvleobU6PPWrNw6gy8oJY0kZWyRKlngn5dRx" target="_blank" rel="noreferrer noopener">Game7</a> DAO. 



Before working at MetaMask, Cantele led product for the Panvala grant funding DAO (decentralized autonomous organization), one of the earliest grant DAOs in the Web3 ecosystem.&nbsp;



NFT marketplace Magic Eden hired Joseph Doll to the role of general counsel.



Doll previously served as a corporate associate for Fenwick &amp; West, where he structured, negotiated and executed equity and token funding.



Web3 Ventures appointed Zach Rosen to its advisory board as the company gains Rosen’s expertise in software engineering and investment banking.&nbsp;



Rosen is a co-founder of Brydge, a startup that enables decentralized applications to deploy on one chain and accept payments from others. He said in a statement that he would leverage his network and background within the Web3 space to help identify and evaluate crypto projects for Web3 Ventures’ platform.



Crypto trading and lending platform Abra reportedly laid off about a dozen employees this week as market turbulence continues. Abra CEO Bill Barhydt <a href="https://www.theblock.co/post/155209/abra-becomes-latest-crypto-firm-to-cut-jobs" target="_blank" rel="noreferrer noopener">told The Block</a> that the job cuts — representing about 5% of the company’s workforce — were done “purely as a cost-saving measure.”



An Abra spokesperson did not immediately return a request for comment. &nbsp; &nbsp;



In case you missed it, crypto exchange Bitpanda <a href="https://cms.blockworks.co/bitpanda-to-slash-nearly-30-of-workforce-citing-recession-threat/" target="_blank" rel="noreferrer noopener">is letting go about a third of its workforce</a>. The company, backed by billionaire Peter Thiel, wrote in a <a href="https://blog.bitpanda.com/en/way-forward" target="_blank" rel="noreferrer noopener">letter to employees</a> that it wants to cut down its headcount from more than 1,000 to 730 as it seeks to improve its financial health.



Meanwhile, crypto exchange Kraken posted more than 600 new job ads in the United States in the last seven days, according to a June 29 study by <a href="https://cryptojobslist.com/" target="_blank" rel="noreferrer noopener">Crypto Jobs List</a>. The Kraken listings account for nearly 20% of the new American crypto job ads over the span.



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Latest in Crypto Hiring: Former Facebook, BNP Paribas Pros Join Space

<div id="highlights-block_61e1b5c3c0707" class="highlights">
 <ul>
 <li>The company has been informally offering trading strategies to institutional clients — the hire is an effort to solidify that business</li>
 <li>Abra’s CEO hinted that the company’s first institutional funds could be in the works</li>
 </ul>
 
</div>



Abra is getting into the institutional crypto asset management business.



The crypto wealth manager is looking to hire its first head of trading strategies, who would be tasked with building out a team and the trading infrastructure to invest in a variety of different strategies.



Abra on a one-off basis has already been offering customized trading strategies to institutional clients, CEO Bill Barhydt told Blockworks. The thinking behind the new position is to formalize and expand that pipeline — with a focus on investments that drive yield enhancements.



Strategies in the mix include basis trades and arbitrage opportunities, and the idea is to build on yield enhancement opportunities that Abra has already developed on the credit side of the business.&nbsp;



Ben Liams, the company’s vice president of trading and credit markets, said ideal clients include digital assets engineering and financial firms looking for “yields that might be difficult to access in typical credit and lending arrangements.”



“This has been done on a very limited basis,” Liams said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Given the fast growth of our platform, this is definitely something where creating a unified platform for those kinds of opportunities inside Abra — we anticipate the need would grow.”</blockquote>



The new head of trading strategies will also be responsible for monitoring risk, both when it comes to asset management and coordinating with the lending side of the business.



Barhydt said Abra isn’t now engaging in proprietary trading with client money, but may in the future consider prop trading with the company’s own balance sheet.&nbsp;



The Abra head also said the company is considering starting institutional funds that would run client money — potentially in making its high-yield crypto products available via a fund format.



“There’s a huge opportunity to open up that model beyond just retail investors to institutional clients, including family offices,” he said.



<hr class="wp-block-separator">
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<hr class="wp-block-separator">

Crypto Startup Abra Enters Institutional Asset Management Business

Sam Reynolds

<div id="highlights-block_614129973e5c5" class="highlights">
 <ul>
 <li>Abra launched a full suite of financial products including lending earlier this year </li>
 <li>The company says it will use the proceeds of the round to expand its product team</li>
 </ul>
 
</div>



Digital Asset Summit 2021, New York City — Abra announced today that it has closed a $55 million Series C round, bringing the company’s total funds raised to $85 million. 



Abra began as a custodial wallet, but now bills itself as a wealth management platform having launched&nbsp; borrowing, trading, and remittance services earlier this year.&nbsp; In a release, the company said that its assets under management has grown to $1 billion and its 155,000 customers have processed nearly $4 billion in transactions since its inception.



“Cryptocurrencies, NFTs and DeFi are now top of mind for almost all investors. The crypto asset class is growing exponentially, even outpacing the early commercial Internet itself. Our vision of crypto-centric banking is coming to life in front of our eyes, and Abra is excited to serve as a leader in the space,” said Abra CEO Bill Barhydt in a statement. “I’m proud of what the Abra team has accomplished, and we look forward to continuing to scale our platform and serve our customers as their trusted and compliant crypto banking platform.”



Abra says it plans to use the funds to expand its global product team.



On stage at the Digital Asset Summit, Barhydt said more funding rounds are likely as the company is &#8220;growing like weeds&#8221; and has &#8220;hundreds of thousands of consumers on the retail side.&#8221;



In addition, he said that Abra &#8220;Earn&#8221; accounts will be launched soon in New York.



In 2019, <a href="https://siliconangle.com/2020/07/13/crpyto-firm-abra-settles-regulators-offering-unregistered-swap-transactions/" target="_blank" rel="noreferrer noopener">Abra was fined</a> $300,000 by both the SEC and CFTC for offering unregistered swap transactions on securities. As part of the agreement with regulators, Abra has agreed to stop offering tokenized stocks and similar futures services. The company claimed that it was largely run out of the Philippines, and thus not under the jurisdiction of US law, and also that it blocked US users.



A record amount of money continues to <a href="https://cms.blockworks.co/crypto-venture-funding-is-at-an-all-time-high-this-is-where-the-money-is-going/">pour</a> in the digital asset space. In fact, As of mid-June, an all-time high of $17 billion has been invested into crypto projects in 2021 as Blockworks previously reported.



Already this week, Amberdata announced it had <a href="https://cms.blockworks.co/citi-leads-15m-investment-into-digital-asset-company-amberdata/" target="_blank" rel="noreferrer noopener">raised</a> $15 million in a Series A funding round led by Citi. Separately, layer-2 solution Immutable <a href="https://cms.blockworks.co/layer-2-solution-immutable-closes-60m-series-b-round/" target="_blank" rel="noreferrer noopener">closed</a> a $60 million Series B co-led by BITKRAFT Ventures and King River Capital.



This story was updated on September 15, 2021, at 10:12 am ET.



<hr class="wp-block-separator"/>



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