This article comes fromBlockworks, original author: Michael Bodley
Odaily Translator |
Crypto investment manager Abra is restructuring several of its business lines and considering cutting costs as a buffer against a bear market, according to three people familiar with the matter. It is reported that the company hopes to become the first regulated cryptocurrency bank in the United States.
The steps taken by top Abra executives include small layoffs in the company's sales, trading and research departments, people familiar with the matter said. Still, the changes are significant given the high-level departures involved.
Those fired in the past few months include Michael Maizels, head of research at Abra, and Robin Malik, head of over-the-counter trading. There was no indication the firings were performance-related, the sources said. These moves appear to be due to the difficult crypto market environment and the need to cut costs. Both Maizels and Malik declined to comment.
“(The layoffs) are more about cost reduction and efficiency gains, people have no business to do, no jobs to do — nothing to do with performance at all,” one source said.
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Abra looks to appoint a chief investment officer
In December, Chief Executive Bill Barhydt and Abra executives named Robert Wallden as head of the firm's institutional asset management. Wallden has a solid resume, with stints at BNP Paribas, Deutsche Bank and Gelber Group, but he also has a background in sales, two sources said.
Wallden, who previously served as director of origination for credit and trading platforms at Abra, appears to have some trading experience based on his LinkedIn profile. But both sources said his new role was unusual given his previous sales experience. Wallden did not respond to a request for comment.
Abra made its first foray into institutional asset management in early 2022, building one-off trading strategies for individual clients. The general idea at the time was to transfer the crypto-yielding opportunities developed in the commercial credit space to the emerging trading and treasury space.
The latest move could stem from Abra's planned new position, chief investment officer, for which interviews have already taken place, one source said. This role will create a new organizational structure designed to link Abra's trading, credit and asset management functions. The heads of the above divisions will all report to the Chief Investment Officer, who will be tasked with overseeing and determining how capital is allocated to each division accordingly. Such a setup would simplify and strengthen internal communications, the source said.
That plan appears to have stalled internally, possibly due to the cost of hiring a chief investment officer in the current market, the source added.
Barhydt declined to comment on individual employees. He did not respond to questions about the future chief investment officer.
Regardless, the hiring for the position would represent a change in Abra's organizational structure, according to two sources.
"There is definitely some restructuring going on," one of the sources said.
Barhydt said the firm expanded its trading operations in the fourth quarter to include OTC crypto functions, structured products and derivatives. "Our trading business is doing well."
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Barhydt's big crypto banking ambitions
Barhydt announced in September that Abra was aiming to become a bank, at the same time that plans to appoint a chief investment officer (if there was one) were picking up steam, one of the sources said. The plan is to create two entities: Abra Bank in the US and Abra International to serve non-US customers.
Abra said at the time that the U.S. entity “will be the first regulated bank in the U.S., enabling our U.S.-based clients to deposit and bank using digital assets and access global fiat currency deposits and withdrawals.”
“A lot of that has to do with the current state of the economy and the difficulty of raising new money, injecting new capital into the company. Priorities have been realigned,” the source said.
Abra is a well-known credit specialist in the industry with a large number of institutional clients. Barhydt told Blockworks that the firm "closed a lot of institutional deals in the quarter," adding that the trading desk "grew significantly this quarter."
The collapse of Sam Bankman-Fried's companies Alameda Research and FTX doesn't seem to have hit Abra too hard. November 10,Barhydt said in the announcement, Abra’s “retail, lending, and private crypto wealth management businesses have no exposure to Alameda, nor substantial exposure to FTX or FTT tokens.”
Barhydt said at the time, “Abra did use the FTX platform for some trading activity. We have transferred most of the assets from FTX and hedged the remaining assets.”
Barhydt credits the firm's ability to "manage risk so effectively" to rigorous risk management practices on lending.
“Every lender suffers losses,” Barhydt said at the time. “The key is to practice sound risk management to minimize the impact of losses while maintaining a reasonable level of profitability.”
Still, there is clearly a top-down push to reassess Abra's dealmaking approach, three sources said.
"All of this seems to be a knock-on effect," one of the sources said. "When you put the pieces in place, everything makes sense and the whole point is to reform the deal. Would this have happened if the industry hadn't been bogged down?" ? I don’t know about this.”
All three sources mentioned that Abra was "restructuring," while Barhydt said "Abra is not restructuring anything."
