Josh O"Sullivan13 hours agoCrypto platform Yield App shuts down citing FTX lossesYield App halts operations, citing losses from FTX exposure, despite previous assurances of no significant impact.2155 Total views3 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksUpdate June 28, 13:20 pm UTC: This article has been updated to attribute quotes to Tim Frost.
Yield App, a Seychelles-incorporated crypto investment platform, announced on June 28 that it would halt all operations on its platform with immediate effect.
An official statement said the decision “had been made to ensure fair and equal treatment for all Yield App’s users and stakeholders.”“This follows the realization of portfolio losses incurred through third-party hedge fund managers that held Yield App assets in custody on the collapsed cryptocurrency exchange FTX, and who are subject to ongoing litigation.”Source: Yield App
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According to the official statement, Yield App realized portfolio losses due to third-party hedge fund managers that held Yield App assets in custody on FTX, which are “subject to ongoing litigation.”
Yield App has suspended community channels, but a support channel will remain open to the public via the official website.
Tim Frost, CEO of Yield App, told Cointelegraph that the firm has been “pursuing litigation against several hedge funds” that had incurred substantial losses on assets in custody on FTX.“Some of these proceedings are ongoing, 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.”
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Despite the announcement, previous statements from Yield App have cast doubt on the company’s transparency regarding its exposure to the FTX collapse.
In a Discord message dated Nov. 10, 2022, Frost reassured users that the crypto investment firm had “no significant exposure to FTX.”Yield App CEO Tim Frost message stating that the firm has “no significant exposure to FTX.” Source: Yield App Discord channel
A source who wished to stay anonymous expressed confusion at the situation, telling Cointelegraph:“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.”
Frost told Cointelegraph that, per the statement given in November 2022, Yield App itself “did not have significant direct exposure to FTX.”"The indirect exposure that we had through these fund managers came to light much later, since when we have been engaged in said legal proceedings."
Related:Small creditors put at risk by latest FTX bankruptcy developmentFTX selloffs continue
In 2024, the bankrupt crypto exchange FTX saw multiple sales of claims and assets and settled many disputes.
In February alone, FTX offloaded 8% of its stake in the artificial intelligence (AI) firm Anthropic, sold off its European arm for $33 million, and planned the sale of Digital Custody for $500,000.
The ongoing asset liquidation efforts by the collapsed crypto exchange are part of its bankruptcy proceedings.
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