LUNA Exchange-Traded Product Issuances Halted After Price Shellacking

By May 13, 2022DeFi
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Three different exchange-traded product (ETP) issuers announced they would suspend trading or issuing shares in Luna-related investment vehicles after the cryptocurrency lost 99.98% 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 it will be temporarily suspending creations and redemptions of shares in its VanEck Terra ETN (exchange-traded-note) which trades in several European nations, citing the “loss of most of its value and the halt of the Terra network.”

The New York-headquartered firm added that the company 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 NGM exchange in Scandinavia. The firm cited “high volatility and the prevailing uncertainty around the Terra ecosystem.”

Valour added 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 Inc.

As per Swiss-based 21Shares, a company spokesperson 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 “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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