South Korean crypto investment firm Uprise plans to compensate investors for damages incurred when betting its futures bet on Luna Classic (LUC) – a token that was built on the ruins of Terra’s failing ecosystem.
Uprise is making arrangements to compensate 40% of the loss suffered by customers related to its disastrous short bet on the token, according to the Korean newspaper Soul Economic Daily. The short position was placed in May using client funds that were deposited in a $20.3 million (26.7 billion won) discretionary investment vehicle. As reported by Cointelegraph, Uprise lost 99% of its assets on the trade when it was liquidated.
“After obtaining consent from existing shareholders, the compensation process will be implemented,” reads a translated version of the Soul Economic Daily report. Most of Uprise’s clients are high net worth individuals and corporations.
Oh oh #Crypto Brother: #ItsHappening Still#Korean start #UpriseAI Robo Trader lost $20 million #LUNCa #Cryptocurrency that imploded from $60 to fractions of a penny#cryptocurrencies #cryptocrash $LUNC#Blockchain #Bitcoins #BTC #ETH #Ethereum #LUNAhttps://t.co/tjYiGRTGCW pic.twitter.com/l7NxAwg08C
— PSYC Craig ☠️ (@psychedelicraig) July 7, 2022
The compensation plan is to issue Uprise shares to investors based on the company’s valuation following its Series C funding round last year. This puts Uprise at a valuation of around $213.2 million (280 billion won). “The issuance of new shares is expected to represent approximately 3% of the stake,” the report said. Uprise will increase the number of shares through a stock split.
Uprise said it is moving forward with its compensation plan despite not being legally required to. “Although the company has no legal obligation to compensate, this is a measure to continue to develop the activity while restoring confidence through amicable agreements with customers”, specifies the report.
The value of LUNC is subject to extreme fluctuations since the relaunch of Terra 2.0 at the end of May. The token is currently valued at 0.0000997, according to CoinMarketCap.