Cryptocurrency investment app, Abra will stop U.S users from accessing some of their services according to a blog post on Thursday, July 25.
Abra as per the update is making these changes after 11:59 PM EST on August 29, 2019 “in an effort to continue to be compliant and cooperative with US regulations as they currently exist.”
The platform was also quick to point out that non-U.S users would not come under any of the regulatory-related restrictions.
Abra Changes for U.S Customers
Abra will make first make ‘system modifications around its smart contract-based synthetic assets, and then migrate these synthetic assets to a native hosted wallet solution.’
In other words, users will no longer hold private keys for these synthetic cryptocurrencies. Instead, they will only continue to hold private keys for their BTC, ETH, LTC, and BCH assets.
What is a synthetic asset on Abra?
Abra uses a synthetic asset to offer investors the opportunity to track the price movement of specific cryptocurrencies without truly owning these coins,
To purchase these cryptos, users fund their Abra wallet using a U.S.-based bank account, an American Express card, Bitcoin, Bitcoin Cash or Litecoin, after which they can convert their assets to the synthetic asset of their choice.
Other Changes by Abra
After August 29, 2019, US users will no longer be eligible to hold QTUM, BTG, EOS, OMG, SNT. Users who own these assets can exchange them for other available cryptos or withdraw their investments from Abra before the said date. A failure to do this would leave Abra with no other choice but to convert the soon-to-be-removed assets into Bitcoin for users.
For New York residents, the changes have more implications. After the said date, they can only hold Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) on Abra. Further, synthetic asset balances would be displayed in Bitcoin after the deadline, while they would also no longer have the option to deposit or withdraw funds from their accounts using bank ACH, wire or American Express card.
At the moment, Abra is not the only exchange modifying its offering to suit the allegedly strict regulations for crypto companies in the U.S.