Abra, a cryptocurrency investment app, has announced that it would have to make certain changes for its US users due to regulatory restrictions. The firm said that it was making these changes in an effort to comply with existing US laws.
About the Changes
The San Francisco-based company outlined the changes in a blog post on its site. The main change relates to structuring of its holdings for synthetic assets. The firm is planning to modify smart contracts in order to move its synthetic assets to native-hosted wallets. The synthetic assets are used to depositing and withdrawing cryptoassets and enable Abra to offer exposure to moving crypto prices without significantly affecting the user’s balance.
The shift towards native wallets is expected to affect user holdings. Users will only be able to make deposits via a US-based account, Bitcoin, Bitcoin Cash, Litecoin, or using an American Express card. Once the deposit is made, it can be converted into a synthetic asset.
For US users, this migration will mean that they cannot hold onto five specific cryptocurrencies. These coins are QTUM, Bitcoin Gold, OmiseGO, Status, and EOS. This will be implemented in full starting from August 29. After that, all unclaimed assets would be converted into Bitcoin.
For those residing in New York, it will only be possible to hold Ether, Bitcoin, Litecoin, and Bitcoin Cash in the app. All those with synthetic holdings will have to withdraw or convert them. Any leftover funds will be converted into Bitcoin. Besides that, New York-based customers will no longer be able to use American Express, wire transfers, or bank ACH to make deposits and withdrawals after the August 29 deadline. These changes will not affect those outside the US. Despite this, it is not clear how these changes will affect temporary visitors to the US that use the app.
Created in 2015, the Abra app was initially aiming to become a global money transfer mechanism. Abra has created a unique contract-based platform, which lets users create synthetic digital assets based on leading cryptocurrencies. It is the latest among a slew of crypto-focused businesses to modify its business to comply with existing regulations.