The recent Luna crash had a turbulent effect on the entire cryptocurrency space, with many investors losing billions of dollars. Several exchanges and crypto firms also suffered losses.
In one such example, Uprise, a crypto custodial service, and artificial intelligence trading platform became the latest firm to lose $20 million worth of funds, shorting LUNA during the crash in May.
Uprise has lost 99% of its assets and has been liquidated, reports the Seoul Economic Daily, a South Korean media company.
The main reason for such losses is that the robo-advisor, the firm’s AI, made a big mistake in May by misinterpreting the Luna crash.
According to the sources, the total loss done by Uprise is $23 million. 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 at a loss. Furthermore, it has not made any public statement or justification about the situation.
According to sources, the firm is planning compensation for its users along with the details of the loss, though officials have not commented on the same.
This crypto services firm has not yet registered itself as a Virtual Asset Service Provider (VASP), which could be a new source of trouble for Uprise.
The Dark Side of Crypto Firms
While we all know that the LUNA crash has harmed the crypto industry, on the contrary, the incident has exposed many fraudulent effects of crypto firms that have never come under scrutiny until now. Several such firms include Voyager, Three Arrows Capital, BlockFi and Celsius etc.
Overall, the market is expected to continue declining, according to several analysts.