Uprise Lost $20 Million Trading LUNA Futures

According to a story published by the Seoul Economic Journal on Wednesday, the Korean cryptocurrency company Uprise was able to lose practically all of its client’s cash by shorting luna (LUNA) during its price drop and getting caught on the bounces.

The South Korean company advertised itself as using artificial intelligence (AI)-enabled automatic trading algorithms to trade cryptocurrencies on behalf of its customers. The global exchange-traded fund’s platform known as Iruda is the second component of the company’s service that goes by the name Heybit. This trading desk makes up one-half of the service.

Uprise, when it was known as Heybit, would take users’ bitcoin assets into custody and then trade them on the cryptocurrency futures market. The artificial intelligence (AI) trading technique developed by Uprise was designed to reduce the risks involved with utilizing leverage in cryptocurrency trading.

The system was unable to prevent the company from being liquidated out of its LUNA futures trading position, which resulted in a loss of 26.7 billion won ($20 million). This occurred at the time that Luna’s price crashed. Reportedly, it was shorting Luna while its price was falling, but it got caught out amid surprise price pumps along the road. This caused it to lose money.

The funds that were lost account for about 99 percent of the total funds that Uprise was managing on its customers’ behalf. According to the research, these customers include both wealthy individuals and corporate entities as their representation. According to reports, Uprise also suffered a loss of $3 million of its own capital as a result of short-selling LUNA.

It has been claimed that Uprise is contemplating offering some kind of compensation to the affected clients. “It is a fact that the unexpectedly high level of volatility in the market has resulted in losses for certain of our customers’ portfolios. According to the Seoul Economic Daily, a spokeswoman for the corporation stated that they intend to complete the report on the business involving virtual assets in the near future.

Some of Uprise’s financial sponsors include the massive venture capital firm Kakao Ventures of South Korea as well as the significant commercial bank Hana Bank of South Korea. In December of 2021, the company participated in a Series C investment round and brought in approximately $18.3 million.

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The LUNA collapse has now had an effect on another cryptocurrency business, and that is Uprise. Along with its sister token TerraUSD (UST), the token went into a death spiral in May, which has caused major financial concerns for hedge funds and lenders alike, including Three Arrows Capital and Celsius.