On June 28, Yield App, a Seychelles-based crypto investment platform, announced the immediate cessation of all its operations.
This decision, as stated by the company, “had been made to ensure fair and equal treatment for all Yield App’s users and stakeholders.”
The company cited significant portfolio losses due to third-party hedge fund managers who held Yield App’s assets on the now-defunct cryptocurrency exchange FTX, which is currently embroiled in litigation.
Despite suspending community channels, Yield App assured users that a support channel would remain accessible through its official website.
CEO Tim Frost informed Cointelegraph that the company has been “pursuing litigation against several hedge funds” responsible for the substantial losses on assets held in custody on FTX.
“Some of these proceedings are ongoing,” Frost explained.
“However, after 18 months of recovery actions, we have been advised to shutter the platform in the best interest of creditors, whereby the administrators will pursue claims directly.”
Yield App’s transparency has been questioned following the announcement.
“In a Discord message dated November 10, 2022, Frost had reassured users that the firm had “no significant exposure to FTX.”
An anonymous source expressed confusion to Cointelegraph, stating, “This whole thing doesn’t make any sense.
“I think it’s super weird they got affected by FTX when it’s already two years ago, and they gave an official statement.”
Addressing these concerns, Frost reiterated that Yield App itself “did not have significant direct exposure to FTX.”
He clarified that the indirect exposure through fund managers only became apparent later, leading to ongoing legal proceedings.
The collapse of FTX has led to multiple asset sales and settlements.
In 2024, FTX sold claims and assets, including an 8% stake in the AI firm Anthropic, its European arm for $33 million, and plans to sell Digital Custody for $500,000.
These actions are part of FTX’s bankruptcy proceedings aimed at liquidating its assets.
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