The crypto custodian and artificial intelligence trading platform, Uprise, lost $20 million in client funds by discounting Luna, as reported by South Korea’s leading media house Seoul Economic Daily† Uprise reportedly lost about 99% of its assets and liquidated by going short LUNA† The company’s AI, known as Robo Advisor, made a disastrous trade by misinterpreting LUNA’s dramatic crash in May.
According to reports, Uprise lost $23 million shorting Luna in the crash. $20 million comes from users’ money and $3 million comes from the company’s own pockets.
Since then, the company has suspended its services, leaving users in a state of loss. However, Uprise has yet to make its users public about the losses it has incurred following the short circuit of Luna.
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“Due to the high unexpected volatility in the market, there is damage to customers’ assets. We plan to finalize the report on our virtual asset business shortly,” an Upris official told Seoul Economic Daily.
The Upris team not only creates a report to inform about the losses, but also makes plans to compensate users. However, Uprise officials did not disclose the details of the compensation plan.
The crypto service platform is now in the spotlight as SeDaily reported that Uprise has not registered itself as a virtual asset service provider (VASP). The company may soon face court for its accident and is under investigation by South Korean authorities.
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Uprise: Luna Crash Exposes the Dark Side of Crypto Firms
The TerraUST and Luna crash exposed the dark side of crypto companies that were previously unchecked after initiating illegal trades. Companies such as Voyager, Three Arrows Capital, BlockFi and Celsius, among others, are facing the ax after Luna went under.
Voyager has filed for bankruptcy and FTX US could buy BlockFi while Celsius settles loans. We will have to wait and see Uprise’s condition after they disclose their current situation to its customers.
Exchange, custodian and crypto service companies are facing the heat of the market crash and money is bleeding. Several companies have laid off workers to keep afloat in the current bear market, which has been declining for seven months in a row. Read here to know which companies have indulged in massive layoffs of their employees.
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Analysts argue that the bear market could continue this year and could last until 2023. JP Morgan predicted that the price of crude oil could rise from $380 to $380 next year.
The markets and the economy in general could see a slump if these predictions are correct. Exchanges could bear the brunt of the force next year as they may find it difficult to survive in dire economic conditions.