Industry Updates

CoinShares, 21Shares and VanEck suspend FTX ETPs

Market makers unable to provide intraday pricing for the ETPs

Theo Andrew

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CoinShares, 21Shares and VanEck have suspended creations on their FTX exchange-traded products (ETPs) following the collapse of Sam Bankman-Freid’s crypto exchange last week.

Market makers have informed the issuers that they can no longer provide intraday pricing on FTX’s underlying token FTT, which has lost 94% of its value in the past seven days, as digital asset exchanges halt trading on the token.

As a result, the VanEck FTX Token ETN (VFTX), the 21Shares FTX Token ETP (AFTT) and the CoinShares FTX Physical FTX Token (CFTT) have all been suspended from trading.

CoinShares said the suspension was a “direct result” of the current market turmoil including the bankruptcy and the suspicion FTX systems have been hacked just hours following.

Concerns were raised over “abnormalities with wallet movements” which saw $650m withdrawn from FTX funds, prompting the hacking allegations.

“As a result of this news and the disruption to the underlying market for FTT, market makers have notified CoinShares that they cannot currently provide intraday pricing for this security,” it said in a note to shareholders.

It added redemptions will continue to function “for the time being” as it continues to monitor the situation.

21Shares said it requested the suspension of the product after it emerged the company went into bankruptcy. VanEck, whose VFTX is currently suspended on the Boerse Frankfurt, said in a statement it also requested suspension of its product following the bankruptcy news on 14 November. 

Could solana follow?

There are also fears for digital asset solana, which is also tracked by several ETPs including CoinShares, 21Shares and VanEck. The cryptocurrency has fallen 60% over the past seven days due to its close connection with FTX founder Bankman-Fried.

Last Wednesday, 21Shares said in a statement its 21Shares Solana Staking ETP (ASOL) could be indirectly impacted due to its close ties with FTX.

On Thursday, CoinShares revealed it had $30.3m of exposure to collapsing crypto exchange FTX, via several cryptocurrencies including bitcoin, ether and USD Coin, a digital stablecoin pegged to the US dollar.

Europe’s largest issuer launched CFTT in May with a $40m seed from FTX and also partnered with the defunct exchange on its CoinShares FTX Physical Staked Solana ETP (SLNC).

Townsend Lansing, head of product at CoinShares, told ETF Stream: “Neither our physically backed products nor our issuer, CoinShares Digital Securities Limited, is directly exposed to the insolvency or change of control of FTX.

“Furthermore, our cobranding does not change the fact that the products belong to and are under the control of CoinShares. Finally, FTX is not involved in the operations of our products.”