Uprise, a South Korean crypto investment platform, has reportedly lost about 99% of its customers’ assets worth around $20 million when it got liquidated shorting the Terra Classic (LUNC).
A couple of hours ago, a local news outlet reported that Uprise’s Artificial Intelligence (AI), which it describes as a robo-advisor, made a grave mistake on LUNA token – now LUNC – as it crashed from around $60 to fractions of a cent.
We Are On Twitter: Follow Us
The system shorted the LUNC token but got liquidated along the way, resulting in the liquidation of $20 million in customer funds. The firm also lost a total of $3 million of its own funds. This represents about 99% of its assets.
Most users of Uprise’s Heybit service are high-net-worth individuals and corporations who stake their crypto for yield generated by the AI trading on futures markets. The firm has been backed by the Hashed crypto investment firm, Kakao Ventures, and several banks and venture capital firms.
Read Also: This 3-Member Family Suicide is Traced to Terra (LUNA) Crash: Details
Although the firm has not issued an official statement in relation to the current situation, it has suspended its usual services.
An Uprise official who spoke with Seoul Economic Daily said:
“Due to great unexpected volatility in the market, there has been damage to customer assets. We plan 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.
Seoul Economic Daily also stated that it has not registered as a virtual asset service provider (VASP). It reported that Uprise officials feel that the firm is able to avoid the law requiring it to register as a VASP because it does not collect Korean Won nor directly invest in virtual assets, only futures.
Follow us on Twitter, Facebook, Telegram, and Google News
Speculation about the SEC’s 2025 approval of Spot Exchange-Traded Funds (ETFs) has excited investors for…
One right investment choice could change an investor's life, especially in cryptocurrencies, which are rapidly…
As blockchain continues to evolve, one major challenge remains: how can projects ensure security while…
Recently, unfavorable market conditions have led crypto investors to seek new token presales for a…
Forecasts for early 2025 hint at an unexpected leader in the decentralized finance market. Contrary…
The memecoin generator, Pump.fun, has been one of the most discussed projects, which led to…