South Korean startup loses around $24 million on LUNA short position

In May, the South Korean digital-asset management platform Uprise lost about 99% of client funds when liquidating a short position in Terra’s LUNA token, according to Seoul Economic Daily.

The Uprise platform uses an AI-powered system for trading on the futures market. In May, during a catastrophic drop in LUNA’s price from $60 almost to zero, the robo-advisor shorted the asset.

As a result, the startup lost 26.7 billion won (~$21 million) or about 99% of client funds, as well as 3.9 billion won (~$3 million) of its own assets.

The firm suspended trading services, but did not disclose losses to clients or investors.

Uprise was backed by the blockchain firm Hashed, venture arms of tech giant Kakao, banks KB and Shinhan, and other investors. In total, the startup raised 46 billion won (~$35 million).

The majority of Uprise’s trading service clients are high-net-worth individuals and corporations who invested their crypto assets to earn returns generated by the startup’s AI system from futures trading. The company stressed that it had adequately informed users about the risks of losing funds.

The firm also offers «yield farming» services, which continue to operate.

“Due to the unexpectedly high volatility in the market, client assets were harmed. We plan to complete a report on our virtual assets business in the near future,” said an Uprise spokesperson.

Hashed lost $3.5 billion due to the Terra crash.

Read ForkLog’s Bitcoin news on our Telegram — cryptocurrency news, prices and analysis.