The South Korean fintech startup ‘Uprise’ that operates digital asset management and trading services is said to have lost over US$20 million which amounts to 99% of its client funds, liquidated amid the Terra-LUNA crash in May.
The trading unit of the company had placed client funds on a short position on LUNA Classic and that bet went terribly wrong and got liquidated, the Seoul Economic Daily reported. The loss included 3.9 billion Korean won or about US$ 3 million worth of the company’s worth. The compensation plan is said to be formulated soon.
South Korean venture capitals like Blockchain venture fund Hashed, Kakao Ventures, and KB investments have backed the Uprise startup and the company trusted the artificial-based advisory trading services as it was less risky than human led-investments but it did not time well. The system shorted LUNC but got liquidated during the token’s bizarre price pumps along the way leading to customer losses and the company’s 99% of the assets.
“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,” said the company to local Seoul media. The firm has suspended it services and it will notify further details on compensation soon.