Startup Uprise lost 99% of its assets shorting LUNC
This came after the collapse of the Terra Classic blockchain ecosystem in May
07.07.2022 - 10:30
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What’s new? South Korean crypto platform Uprise lost about 99% of its assets when it liquidated shorting the Luna Classic’s LUNC token. This happened in May when the Terra blockchain ecosystem collapsed, the outlet Seoul Economic Daily reports. It is reported that representatives of Sunrise are working on a compensation plan for its customers so that the startup can continue to operate.
Seoul Economic Daily’s material
What is known about liquidation? Uprise used an artificial intelligence-based system that was designed to mitigate the risks associated with leveraged trading. In May, when the LUNC rate collapsed to almost zero, the platform’s robot shorted the asset, but the positions were liquidated due to the high volatility of the rate. This resulted in losses of 2,7 billion won ($21 million) of customer funds and 3,9 billion won ($3 million) of its own funds, which amounted to about 99% of all Uprise’s assets. The platform has suspended services but has not officially informed customers and investors of the losses.
Most of Uprise’s customers are wealthy individuals and corporations who were staking their crypto assets for yield generated by AI through trading on futures markets. Companies such as Hashed and Kakao Ventures have invested in the startup.
Losses for digital asset manager CoinShares as a result of Terra’s collapse exceeded $21 million. In the company’s May 31 report, chief executive Jean-Marie Mognetti called the event “a humbling lesson.”
To find out how to make money on Terra’s relaunch, see the GetBlock Magazine editorial’s feature.
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