The crypto meltdown of 2022 hit many large retail digital asset lenders, including Celsius, Voyager, and BlockFi, costing investors billions. Silicon Valley investment platform Abra, which survived the meltdown, is rebranding as an institutionally-focused investment firm. Last summer, Abra closed its U.S. retail business amidst regulatory scrutiny. The Texas State Securities Board accused Abra of securities fraud, with several other states issuing cease and desist letters for violating securities regulations. Abra settled these claims earlier this year, with investors reportedly getting their money back.
Abra is now targeting private clients, family offices, hedge funds, and other institutional investors. Its subsidiary Abra Capital Management was approved by the SEC to operate as a registered investment advisor. Abra has close to $450 million in assets and offers various services such as trading, borrowing, lending, staking, yield, and asset management. The platform now uses the separately managed accounts model, allowing clients to retain ownership of their assets and independently verify them on-chain. CEO Bill Barhydt believes Abra eliminates third party risks inherent in the lending system.
Institutional and high net-worth investors typically invest in crypto stocks or ETFs, but Barhydt is confident in Abra’s competitive edge. Abra aims to offer reasonable yields on bitcoin and ether, allowing clients to borrow against their assets in a compliant manner. Barhydt, who founded Abra in 2016 after working for NASA and the CIA, believes in the simplicity, ethics, and compliance of Abra’s offerings. SMAs like those offered by Abra are becoming popular among wealth management firms and even crypto exchanges like Coinbase. Barhydt claims to have brought back old customers and signed up new clients, with about 200 institutions and 200,000 retail clients outside the U.S. using the platform.
The minimum investment for a separately managed account with Abra is $100,000, with advisory fees ranging from 1 to 2% depending on the investment products used. Actively managed yield accounts are more expensive, in addition to transaction fees from crypto trading. Barhydt believes Abra’s long-standing presence and survival in the aftermath of the crypto meltdown gives the platform an advantage. Despite the challenges faced by the crypto industry, Abra is confident in its position in the market and aims to continue growing as an institutionally-focused investment firm.
