Kakao-Backed Uprise Loses $20 Million Shorting LUNA During May Crash
Uprise Investment Fund became the latest cryptocurrency company to be affected by the LUNA crash, with over $20 million worth of funds getting liquidated while short-trading the asset during its crash in May.
- According to a local news report on Tuesday (July 6, 2022), Uprise suffered huge losses after entering a short sell position for LUNA using clients’ funds.
- As a result of the violent market volatility, the company lost about 26.7 billion won ($20.4 million), amounting to 99% of customers’ funds. Uprise also lost 3.9 billion won ($2.9 million) of its own assets.
- Meanwhile, Uprise is looking to compensate customers, with a spokesperson for the firm stating:
“It is true that damage to customer assets has occurred due to unexpected great volatility in the market. We plan to finalize the report on virtual asset business soon.”
- The Korean firm runs a crypto trading desk that invests clients’ funds in the cryptocurrency futures market. Uprise also has an ETF investment platform called Iruda.
- Uprise, backed by South Korean venture capital giants like Kakao Ventures and KB Investment, uses “AI-infused robo advisor technology” for its crypto trading.
- Meanwhile, the crash of Terra’s native coin LUNA that occurred back in May has caused a contagion affecting several cryptocurrency companies exposed to the fallen token.
- One of such firms, struggling crypto hedge fund Three Arrows Capital (3AC), saw its $200 million investment in LUNA devalue following the token’s price plunge.
