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.

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