Crypto Firm ‘Uprise’ Loses $20 Million Of ‘Users Money’ By Shorting LUNA

Vinod Dsouza
losing money crypto crash

The crypto custodial service and artificial intelligence trading platform, Uprise lost $20 million worth of customers’ money by shorting Luna, as reported by South Korea’s leading media house Seoul Economic Daily. Uprise has reportedly lost around 99% of its assets and got liquidated by shorting LUNA. The firm’s AI, known as Robo-advisor, made a disastrous trade by misreading LUNA’s dramatic crash in May.

As per reports, Uprise lost $23 million while shorting Luna during the crash. $20 million comes from its users’ money and $3 million comes from the firm’s own pockets.

Since then, the firm has suspended services, leaving users in a state of loss. However, Uprise is yet to issue a public disclosure to its users about the losses it made after shorting Luna.

Also Read: Crypto Market Plagued with ‘HODL’ Culture: Here’s Why it’s Wrong

“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,” said an Uprise official to Seoul Economic Daily.

The Uprise team apart from creating a report to inform about the losses is also chalking out plans to compensate users. However, officials from Uprise did not provide information about 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 firm might soon face the law for its mishap and fall under investigation by the South Korean authorities.

Also Read: Bitcoin’s Chart is Disastrous, Could Fall to $14,600 Next: Claims Analyst

Uprise: Luna Crash Exposed the Dark Side of Crypto Firms

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The TerraUST and Luna crash exposed the dark side of crypto firms that previously went unchecked after initiating illicit transactions. Firms such as Voyager, Three Arrows Capital, BlockFi, and Celsius, among others are facing the ax after Luna came crumbling down.

Voyager has filed for bankruptcy, and FTX US might buy BlockFi while Celsius is unwinding loans. We’ll have to wait and watch Uprise’s condition after they disclose their current situation to its customers.

Exchanges, custody, and crypto service firms are facing the heat of the market crash and bleeding out money. Several firms have fired employees to stay afloat in the current bear market which is down for seven months straight. Read here to know which companies have indulged in mass firings of their employees.

Also Read: GTA 6 Cryptocurrency to be called ‘Crypto’ and not ‘Bitcoin’?

Analysts claim that the bear market could continue this year and it may extend up to 2023. JP Morgan predicted that the price of crude oil might spike to $380 next year from $100.

The markets and the economy, in general, might see a slump if these predictions are accurate. Exchanges might take the brunt of the force next year, as they may find it difficult to survive in harsh economic conditions.