The recent Luna crash had a turbulent effect on the whole cryptocurrency space, with many investors losing billions of dollars. Several exchanges and crypto firms suffered losses as well.
In one such example, Uprise, a crypto custody service and artificial intelligence trading platform, became the latest company to lose $20 million in funds while shorting LUNA during the May crash.
According to the reports from South Korea’s media company, Seoul Economic Daily, Uprise has lost 99% of its assets and has been liquidated.
The main reason for such a loss is that Robo-advisor, the firm’s AI, made a serious mistake by misinterpreting the LUNA crash in May.
As per the sources, the total loss made by Uprise stands at $23 million. Out of this, $20 million is from users’ funds, and $3 million is from the firm’s own funds.
Currently, the firm has suspended all its activities, leaving its users perplexed. Moreover, he made no public statement or rationale for the situation.
As per the sources, the firm is planning out compensation for its users along with details of the losses, though officials have not commented on this.
This crypto services company has not yet registered as a virtual asset service provider (VASP), which could be a new source of problems for Uprise.
The Dark Side Of Crypto Firms
Though we all know that the LUNA crash has harmed the crypto industry, on the contrary, the incident has highlighted many fraudulent effects of crypto firms that have never come into scrutiny till now. Many such firms include Voyager, Three Arrow Capital, BlockFi, and Celsius, among others.
All in all, according to several analysts, the markets should continue their downward trend.
