Update: from Credit Suisse communications department:

Background: Please note there is no impact to Credit Suisse – we are completely hedged. On the record: “The XIV ETN activity is reflective of today’s market volatility. There is no material impact to Credit Suisse.”

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In addition to being the creator of the now infamous XIV ETN - which was reportedly the most popular way of shorting volatility for retail investors, all of whom now face almost certainly total losses - Credit Suisse also happened to be its biggest holder.

Which, now that the ETN appears fated for termination, is suddenly a very big problem for Credit Suisse since according to the latest public filings, the Swiss bank owned 4.79 million units, or over $550 million, worth of XIV at yesterday's close of $115.55, and roughly $480 million less at today's after hours closing tick of $15.43. Of course, if the ETN is redeemed - and with its NAV at $4.22 according to the VelocityShare website - the loss could be total.

And while the question remains who exactly is eating the losses at Credit Suisse - the bank or its clients - the market is not taking chances, and Credit Suisse ADRs have tumbled in Asian trading...

... because if Credit Suisse is on the hook, it would mean two quarters of profits have just been wiped out: recall that CS reported roughly $250MM and $300 million in profits in the last two quarters, which would mean that the XIV loss was roughly equivalent to half a year's worth or profits, an outcome which the regulators will be very interested in, not to mention shareholders, clients, and their lawyers.

Finally, completing the irony, there's this: