CoinShares lost more than $21 million from Terra’s collapse

The company’s chief executive Jean-Marie Mognetti called the event “a humbling lesson”

01.06.2022 - 10:45

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What’s new? CoinShares, a digital asset management company, has suffered losses as a result of the collapse of the Terra ecosystem and the TerraUSD (UST) algorithmic stablecoin. The total loss amounted to £17 million ($21,4 million at the exchange rate on 1 June). In a May 31 CoinShares report, chief executive Jean-Marie Mognetti called the event “a humbling lesson.”

The full version of the report

What other data has been released? According to Mognetti, the losses are related to the liquidation of the company’s assets in UST. He stressed that the losses will obviously affect CoinShares’ Q2 performance, but they did not affect the company’s individual capital market operations or the collateralization of its investment products.

In the report, Mognetti also reported CoinShares’ operating losses for 2021. They amounted to £2,4 million ($3,02 million). As for the Q1 2022 figures, the company recorded earnings before interest, taxes, depreciation and amortization (EBITDA) of £18,7 million ($23,55 million), down 45% from the same period in 2021.

What is known about CoinShares? The company provides asset management services to institutional and retail investors. According to the company’s website, it was the first in the world to release a number of investment products in the field of digital assets, including a bitcoin fund launched in 2014 and BTC-backed securities, which became available on regulated exchanges in 2015.

What events happened before? In March, CoinShares announced the purchase of an additional 20,8% stake in the Swiss regulated bank FlowBank. The deal totaled 24,74 million francs ($26,38 million at the exchange rate on March 15, 2022). This brought CoinShares’ stake to 29,3%.

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