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21Shares and Valour offer cash tender for terra ETP investors

Investors offered a way out of their terra ETP holdings

Theo Andrew

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21Shares and Valour have offered investors a voluntary cash tender for their shares in their respective terra exchange-traded products (ETPs) despite the digital token remaining almost worthless.

In a statement published last month, Valour said it offered investors 0.01 Swedish krona ($0.00089) for their securities and set a deadline for participation on 31 August.

Meanwhile, 21Shares said it would be publishing the full details of the tender for the 21Shares Terra Classic ETP (LUNA) in October.

Currently, one terra token is worth $0.00023 having been worth $98.70 at its peak in April. The value of the crypto token plummeted in May after its sister crypto coin luna depegged from the US dollar.

VanEck, the only other issuer to have launched a terra ETP, said it would not be issuing voluntary cash tender for its product as it was unsure of its value for investors.

A VanEck spokesperson said: “VanEck will take the most favourable measures to protect the interest of its investors.

“A cash tender has not been offered so far, as in our view it is not entirely clear, if this will be in the best interest of all investors. But VanEck has waived the management fee for its product.”

VanEck and 21Shares suspended creations and redemptions on their terra ETPs in May while Valour halted trading completely following the collapse in value. 

Later that month, Valour delisted the Valour Terra ETP from the Nordic Growth Market after the nomination committee of the exchange said it could no longer be traded in a “fair and orderly manner”.

Since then, the shares have been held in an investment savings account. Investors who did not take the voluntary tender offer face a mandatory redemption of their shares at the trading prices of the underlying asset, currently much lower than the cash tender offer.

Conversely, 21Shares said it would continue operating LUNA despite admitting it was unlikely to resume trading due to its lack of value.

The firm said investors who choose to remain in the ETP are likely to receive proceeds from airdrops expected to occur over the next three years.

In June, 21Shares changed the name of its terra ETP to reflect the renaming of the Terra Blockchain Network to Terra Classic.

Last week, the manhunt for the founder of the digital asset Do Kwon escalated after South Korean prosecutors asked Interpol to issue a red notice against him.

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