A South Korean Crypto Firm Has Lost 99% Of Its Assets Trying To Short LUNC.
The Korean-based crypto investment firm has reportedly been liquidated and lost almost all of its customer’s assets, a local news outlet reported.
The losses associated with LUNC (formerly Terra LUNA) appear far from over. While a lot of people lost billions when Terra collapsed, another group is now losing their money through futures trading on LUNC. Latest reports indicate that a crypto firm based in South Korea has been liquidated, leading to a loss of 99% of its customers’ assets amounting to $20 million.
The firm, named Uprise, employed Artificial Intelligence (AI) to generate futures trades on LUNC. These are usually high-yield trades that attract a hoard of big-money investors. The company is backed by banks, rich individuals, corporations, and venture capital firms that stake high on the trades. The AI trading facilitation by Uprise is called the Heybit service.
AI Beaten By LUNC
Apparently, the trading AI used by Uprise made a costly miscalculation when it executed a short on LUNC in a futures trade. As nothing fell in a straight line, the system got liquidated again and again due to LUNC abnormal price pumps along the way. The company’s AI model fell apart when the values plummeted from $60 down to less than a cent losing all of the customers’ funds amounting to $20 million were wiped out. Uprise claims to have incurred a $3 million loss on its part.
Suspension Of Services
Following the catastrophic liquidation, Uprise has since moved to suspend all trading operations on its platform. However, the company is yet to issue an official statement regarding the matter. However, an official from the firm made a bit of a statement concerning the trading suspension.
He said,
“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.”
Uprise is also reported to be working up a plan to compensate the investors who lost the $20 million. This will allow the firm to resume operations without hindrances.
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Source: https://thecryptobasic.com/2022/07/09/crypto-firm-losses-20-million-trying-to-short-terra-luna-classic-lunc/?utm_source=rss&utm_medium=rss&utm_campaign=crypto-firm-losses-20-million-trying-to-short-terra-luna-classic-lunc