DeFi exposure related to Terra’s stablecoin UST saw CoinShares, Europe’s largest digital asset firm with billions of assets under management, lose more than $21 million, the firm’s CEO Jean-Marie Mognetti revealed on Tuesday.
The CoinShares chief’s comment on the loss was part of his investor relations message to the firm’s clients published in the 2021 Annual financial report.
While the loss will be reflected in the company’s Q2 earnings report, Mognetti said he would wait until then or the earnings call scheduled for August to give an update.
CoinShares had no direct exposure to the UST
According to the CoinShares co-founder, while the company’s trading activities mean it hasn’t been directly exposed to the LUNA price crash, it is active in the DeFi space. So when the implosion happened, he had been exposed to UST through a book he was editing.
“Following the events of the last few weeks, we have booked an exceptional loss from our DeFi activities of £17m on liquidating our holding in UST,” he explained.
That’s about $21.4 million lost, but the CEO of CoinShares is optimistic that it won’t impact his business going forward.
“While this obviously impacts on the Group’s performance for Q2, this loss has not had any impact on any of our additional Capital Markets activities, nor does it in any way impact upon the hedging and collateralisation of any of the Groups ETPs.”
It’s a “battle scar”
Despite the loss, CoinShares views it (the collapse and loss of LUNA) as a humbling experience and a “battle scar” that the team learned from and will not forget.
The events also gives them the morale focus on providing “the premier investment technology for the digital asset sector.”
Mognetti also says the company had an “outstanding” 2021, with revenue for the financial year up more than 500% year-on-year to over £113m (£142.4m). millions of dollars). However, shareholders may not see the value due to the global macroeconomic environment and the lack of liquidity in the company’s shares.
Terra’s collapse has resulted in the creation of a forked chain LUNA 2.0. The old chain is called Luna Classic (LUNC).
