Crypto platform Yield App has ceased operations due to the FTX bankruptcy
The management claims that the platform’s portfolio assets were blocked on the exchange
28.06.2024 - 15:32
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What’s new? Seychelles-registered crypto investment platform Yield App has announced the immediate cessation of all operations on June 28 in preparation for the commencement of liquidation proceedings. An official statement said the decision “had been made to ensure fair and equal treatment for all Yield App’s users and stakeholders.”
What else is known? Yield App claims it suffered portfolio losses because third-party hedge fund managers stored its assets on the FTX crypto exchange, which went bankrupt in November 2022 as a result of a multi-billion dollar fraud by its management. Those assets are now the subject of ongoing litigation, according to Yield App representatives.
Yield App CEO Tim Frost said the company itself has also initiated litigation against several hedge funds whose activities led to losses. Some of these are still ongoing, but after 18 months of foreclosures, Yield App was advised to shut down the platform for the benefit of creditors.
That said, immediately after the collapse of FTX, on November 10, 2022, Frost assured users in the platform’s Discord channel that the Yield App would not be significantly impacted by the event. In a new comment to Cointelegraph, the senior executive clarified that he was then referring to the direct impact of the exchange’s bankruptcy on his platform:
“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.”
FTX managers continue to sell off the exchange’s assets to return funds to clients. This year, FTX sold an 8% stake in AI startup Anthropic and its European division, while a sale of its Digital Custody platform is also expected.
Earlier this month, FTX customers filed a court petition calling the exchange’s bankruptcy process a “second act of theft” of their assets. They demanded that ownership of FTX’s $8 billion in assets be established.
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