Uprise was liquidated LUNA futures and lost $20 million of customer funds.
South Korean crypto startup Uprise loses all client funds by shorting LUNA during sale, Seoul Economic Daily news yesterday.
This Korean company uses automated artificial intelligence (AI) trading strategies to trade cryptocurrencies on behalf of its clients.
Uprise takes crypto assets from customers and trades them in the futures market. Uprise's AI-powered trading technology is supposed to reduce risk.
However, the system failed to prevent the company from being liquidated from its LUNA futures trading position and losing 26,7 billion won ($20 million) in the process.
The loss amount is equivalent to about 99% of the client funds managed by the company. According to the report, these customers are high net worth individuals and organizations.
Uprise is also reported to have lost $3 million from its own fund in short-term trading of LUNA.
Uprise is considering compensating affected customers.
Korean venture capital giant Kakao Ventures and major Korean commercial bank Hana Bank are among the supporter Uprise. The company raised about $18,3 million in a Series C funding round in December 12.