VanEck and 21Shares Suspend Their Terra ETPs After Recent Collapse

Bhushan Akolkar
May 14, 2022
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After the recent collapse of the Terra ecosystem this week, VanEck and 21Shares have decided to suspend the creation and redemption of shares in their respective Terra exchange-traded products (ETPs). The 21Shares Terra ETP (ticker LUNA SW) and the VanEck Terra ETN (VLNA GR) shall be thus halting the processes.

Terra’s native cryptocurrency LUNA was supposed to help the UST stablecoin retain its peg to the USD. However, the LUNA price crashed all the way to $0 while the UST continued to de-peg from the Dollar. Ultimately, Terraform Labs had to halt the Terra blockchain momentarily which has finally resumed now. Hany Rashwan, chief executive officer and co-founder of 21Shares, a crypto ETP provider, said:

“We will continue to closely monitor this fast-evolving situation on the underlying. The Luna network is currently operating intermittently and inconsistently producing blocks and cannot operate normally. Therefore transactions can still be performed but in a disrupted environment.”

On the other hand, VanEck said that it would take a similar stand on the matter. The issuer noted: “The low value of Luna caused issues and risks for the Terra network which trigger the decision by Terra validators to halt the network. At this point, it is unclear when (and if) the network will be restarted.”

Terra’s Path to Recovery

After all the drama around, Terra founder Do Kwon came ahead proposing a revival path for the LUNA ecosystem. He proposed resetting the Terra network ownership to $1 billion and redistributing. Do Kwon proposed redistributing this amount among the LUNA holders, UST holders, the Community Pool, and other stakeholders in the Terra ecosystem.

Also, there were reports that Swiss asset manager GAM would come forward to bailout Terra, however, it denied any such plans. It will be interesting to see what other action plans do Terra developers have going ahead.

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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.