Uprise, a South Korean crypto investment startup platform has reportedly lost $20 million when it got liquidated shorting the Luna Classic token.
Uprise’s trading desk Heybit uses an AI trading system that was designed to reduce the risks associated with leveraged trading. Uprise’s AI, which it calls a robo-advisor, made a disastrous misread in on LUNC as it fell swiftly from $60 to fractions of a cent. The system shorted LUNC but got liquidated during the token’s bizarre price pumps along the way, leading to $20 million in customer losses and $3 million of its own losses.
Most users of Uprise’s Heybit service are high-net-worth individuals and corporations who stake their crypto for yield generated by the AI trading on futures markets. The firm has been backed by the Hashed crypto investment firm, Kakao Ventures and several banks and venture capital firms.
The firm has suspended services, but has not issued an official disclosure to its clients about the losses. Uprise officials are reportedly working on a compensation plan for its customers so that it can continue to operate.
