Exchange in Korea nearly “lost” customer assets because of short LUNA

Exchange in Korea nearly "lost" customer assets because of short LUNA

According to South Korea’s Seoul Economic newspaper, South Korean cryptocurrency exchange Uprise almost lost all of its customers’ funds for shorting LUNA and was liquidated for more than $20 million.

According to Seoul Economic newspaper, South Korean crypto startup Uprise almost lost all of its clients’ funds for shorting LUNA during the sale and was liquidated for more than $20 million.

Uprise advertises itself as a platform that uses automated trading strategies enabled by artificial intelligence (AI) to trade cryptocurrencies on behalf of its clients. Uprise has 2 main services Heybit and Iruda. In particular, Heybit is a service that uses robots for automated trading. And Iruda is a global exchange-traded fund platform.

With Heybit, Uprise uses custodial crypto assets from customers and trades futures. Uprise’s AI-powered trading technology is said to reduce the risks associated with leveraged cryptocurrency trading.

However, in the process, the AI ​​system was unable to help the company avoid the liquidation of 26.7 billion won ($20 million) for shorting LUNA. When LUNA fell sharply, Uprise is said to have shorted LUNA with high leverage. However, there are periods when LUNA is suddenly pumped up, causing it to rise against the waves. Presumably, this caused Uprise to liquidate its position and lose more than 20 million USD.


It is known that this is the amount of money that Uprise manages on behalf of its customers. Earlier, Uprise was also reported to have lost $3 million from its own fund when shorting LUNA. Uprise is reportedly looking into some form of compensation for affected customers.

“It is true that there has been damage to customer assets due to unexpected large market fluctuations. We plan to finalize the report on the digital asset business soon,” the exchange representative said.

Kakao Ventures – a Korean venture capital giant and Hana Bank – a major Korean commercial lender are among the investors backing Uprise. In December 2021, the company raised approximately $18.3 million in a Series C funding round.

Uprise is the latest crypto business affected by the LUNA collapse. The LUNA-UST collapse caused serious financial problems. Typically, LUNA is the main cause of the bankruptcy of the hedge fund Three Arrows Capital and the “staggering” Celsius lending platform in recent times.

Recently, South Korean Justice Minister Han Dong-hoon met with US prosecutors officials to discuss cooperation in investigations related to crypto-related crimes. The two parties are said to have agreed to share their latest investigative data on Terra-LUNA.

The $40 billion Terra crash drew regulatory scrutiny from both countries. Recently, the US opened a new investigation into Do Kwon – Co-Founder, CEO of Terra. Meanwhile, South Korean prosecutors are looking into several charges including Do Kwon’s fraud, market manipulation and tax evasion.

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