Another Blow to Crypto Users in the U.S.: Abra Announces Restrictions

Amidst the continued regulatory uncertainty and restrictions, Congressional hearings, and presidential comments, mobile crypto wallet app Abra is forced to make changes that will inevitably impact its U.S. customers.

The company said they had to make these adjustments “in an effort to continue to be compliant and cooperative with U.S. regulations as they currently exist.”

Abra decided that the best course of action is to migrate its synthetic assets “to a native hosted wallet solution.”

As their website explains, Abra’s synthetic asset model “leverages bitcoin and litecoin blockchain-enabled smart contracts to reduce friction for anyone interested in buying, selling, and holding other assets such as alternative cryptocurrencies”, so that investors can gain exposure to cryptocurrencies and fiat currencies. On Abra, a synthetic asset is anything other than Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

As a part of their system modifications around Abra’s synthetic assets, they will migrate these assets to a native hosted wallet solution, but the private keys for Bitcoin, Bitcoin Cash, Litecoin, and Ethereum balances remain with the users.

What that means for Abra users is that, after August 29, 2019:

• U.S. users will no longer be able to hold QTUM, BTG, EOS, OMG, and SNT; any remaining balances, if not exchanged or withdrawn, will be converted to Bitcoin in the app.
• New York residents will be able to hold only BTC, ETH, LTC, and BCH on Abra, and they won’t be allowed to use ACH (automated clearing house), wire or American express card for deposit/withdraw; synthetic assets that are not transferred or sold by this date “will be shown as Bitcoin in the app”.

“Operating in the United States has become increasingly complex and challenging”, concluded Abra. “We hope, and look forward to bringing our full offering back to U.S. users in the near future.”

As reported, some U.S.-based exchanges have recently announced the delisting of several cryptocurrencies for U.S. customers supposedly in response to the regulatory uncertainty pertaining to what cryptoassets will be considered as securities and which ones will not by the country’s financial regulator.
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Meanwhile, a major U.S.-based crypto company Circle, owner of the Poloniex exchange, announced this week that they’re opening a new office in Bermuda.

“While many governments around the world have not kept pace with the regulatory requirements driven by rapid innovation in digital asset businesses and crypto, Bermuda has leapt forward with an exceptionally well designed and comprehensive regulatory framework,” the company said, adding that non-U.S. customers will use Poloniex through our new Circle International Bermuda entity.

And while the exchange is planning to launch new features and list new coins in the coming months, “Unfortunately, because of U.S. regulatory limitations, we will not be able to offer many of these new services to U.S. persons for now,” Circle said.

As reported, Hester Peirce, a commissioner at the Securities and Exchange Commission (SEC) who has won the moniker “Crypto Mom,” said recently that the country’s financial system’s reluctance to provide firm cryptocurrency guidelines is dangerous, and could lead to the United States falling behind other more pro-active nations.
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Read more: Crypto Trading Getting More Difficult in the U.S., What Can Be Done?