LUNA Exchange-Traded Product Issuances Halted After Price Shellacking
The decisions by three issuers come after the collapse of algorithmic stablecoin UST along with the LUNA ecosystem.
May 13, 2022 at 5:14 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/TKSZJP5BQJFBTIMUNOSHKU6CLY.jpg)
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Three different exchange-traded product (ETP) issuers announced they will suspend trading and issuing shares in LUNA-related investment vehicles after the cryptocurrency lost almost all of its value over the course of a week.
VanEck, Valour and 21Shares, all of which offer luna ETPs in Europe, suspended issuing shares, citing the network’s recent issues, which include two complete shutdowns of the purportedly decentralized network. All three products lost close to 100% this week.
VanEck alerted investors Friday that it will be temporarily suspending creations and redemptions of shares in its VanEck Terra ETN (exchange-traded-note), which trades in several European nations. The firm pointed to the “loss of most of its value and the halt of the Terra network.”
VanEck added that it is “unable to conduct transactions in Luna through the Terra network. Therefore, it is technically not possible to accept creations and redemption for VanEck Terra ETN.”
Likewise, Valour said it is halting trading of its Valour Terra (LUNA) SEK product, which trades on the Nordic Growth Market in Scandinavia. The firm cited “high volatility and the prevailing uncertainty around the Terra ecosystem.”
Valour also said that it seeks to “provide a market, through the market maker, as soon as it is possible and allowed.” Valour is a unit of Canadian-listed DeFi Technologies.
Meanwhile, a spokesperson for Swiss-based 21Shares told CoinDesk that given the LUNA network “operating intermittently and inconsistently, 21Shares is unable to provide creation and redemption operations and is suspending the quotation of the Terra ETP. We will continue to closely monitor this fast evolving situation on the underlying.”
21Shared warned investors on Thursday that “if the price of LUNA drops to zero, that will be reflected in the indexed products and the value of the tracker fund will also fall to zero. As LUNA experiences low prices and high volatility, it is likely that exchange spreads will continue to widen, which may ultimately lead to delisting on the part of the exchanges.”
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Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.