The 22 degree radius halo is formed by sunlight, or in this case moonlight, passing through hexagonal ice crystals in cold high cirrus cloud.

Rays enter a prism side face and leave through another inclined 60 degrees to the first. To form the circular halo rather than a sundog or tangent arc (their ray paths are the same) the crystals must tumble and be randomly oriented.

The puzzle is that ice crystals large enough to form halos do not tumble, they are instead well oriented by aerodynamic drag forces.

One possibility is that the halo is formed by cluster crystals like those at right in a sample of diamond dust taken by Walter Tape at the South Pole. Sampling cirrus cloud when a halo is seen is more challenging.