Korean startup Uprise lost $20 million shorting LUNA
Crypto Custody and AI Trading Platform Managed to Lose Nearly All of Its Clients' Assets in Short -circuiting LUNA, the native token of Terra Classic.< /p>
New
South Korean crypto investment platform Uprise reportedly lost around 99% of its assets worth around $20 million when it was liquidated by shorting the LUNA token.
Uprise's Heybit trading desk uses an artificial intelligence (AI) trading system designed to reduce the risks associated with leveraged trading.
Local newspaper Seoul Economic Daily reported on July 6 that Uprise's AI, which it calls a robo-advisor, made a disastrous misread in May on the LUNA token as it fell precipitously from $60 to fractions of a penny. The system shorted LUNA but was liquidated during the token's bizarre price pumps along the way, resulting in $20 million in customer losses and $3 million in its own losses. In total, Uprise lost approximately 99% of its assets.
Most of the users of Uprise's Heybit service are high net worth individuals and companies who stake their crypto for the return generated by AI trading in the futures markets. The venture has been backed by crypto investment firm Hashed, Kakao Ventures, and several banks and venture capitalists.
The company has suspended services, but has not released official loss information to customers. A Uprise official confirmed to Seoul Economic Daily that:
"Due to unexpected high market volatility, customer assets have been damaged. We expect to finalize the report on our virtual asset business soon."
In addition to officially notifying its users, Uprise officials are reportedly working on a compensation plan for its customers so that it can continue to operate.
Related: Korea, US agree to share Terra survey data
With Uprise in the spotlight, the Seoul Economic Daily pointed out that it has not registered as a virtual asset service provider (VASP). He reported that Uprise officials believe the company is able to circumvent the law requiring it to register as a VASP because it does not collect Korean won or invest directly in virt...
Crypto Custody and AI Trading Platform Managed to Lose Nearly All of Its Clients' Assets in Short -circuiting LUNA, the native token of Terra Classic.< /p>
New
South Korean crypto investment platform Uprise reportedly lost around 99% of its assets worth around $20 million when it was liquidated by shorting the LUNA token.
Uprise's Heybit trading desk uses an artificial intelligence (AI) trading system designed to reduce the risks associated with leveraged trading.
Local newspaper Seoul Economic Daily reported on July 6 that Uprise's AI, which it calls a robo-advisor, made a disastrous misread in May on the LUNA token as it fell precipitously from $60 to fractions of a penny. The system shorted LUNA but was liquidated during the token's bizarre price pumps along the way, resulting in $20 million in customer losses and $3 million in its own losses. In total, Uprise lost approximately 99% of its assets.
Most of the users of Uprise's Heybit service are high net worth individuals and companies who stake their crypto for the return generated by AI trading in the futures markets. The venture has been backed by crypto investment firm Hashed, Kakao Ventures, and several banks and venture capitalists.
The company has suspended services, but has not released official loss information to customers. A Uprise official confirmed to Seoul Economic Daily that:
"Due to unexpected high market volatility, customer assets have been damaged. We expect to finalize the report on our virtual asset business soon."
In addition to officially notifying its users, Uprise officials are reportedly working on a compensation plan for its customers so that it can continue to operate.
Related: Korea, US agree to share Terra survey data
With Uprise in the spotlight, the Seoul Economic Daily pointed out that it has not registered as a virtual asset service provider (VASP). He reported that Uprise officials believe the company is able to circumvent the law requiring it to register as a VASP because it does not collect Korean won or invest directly in virt...
What's Your Reaction?
