Yield App ceases operations as part of liquidation proceedings

Yield App, a Seychelles-based cryptocurrency investment platform, has announced the immediate cessation of all activities on its platform as it goes into liquidation. The announcement said that community channels would also be shut down, although a support channel would remain open through the official website yield.app.

“This follows the realization of portfolio losses incurred by third-party hedge fund managers who held Yield App assets on the collapsed cryptocurrency exchange FTX and against whom there is ongoing litigation,” the platform wrote on social media platform X. Users attempting to access the platform’s website are greeted with the same announcement on its homepage.

Yield App’s most recent blog post on June 25 did not indicate that a suspension was imminent. The platform claims the decision to suspend activity was made to “ensure fair and equal treatment of all Yield App users and stakeholders.”

Yield App raised nearly $5 million in 2020 in a hybrid funding round led by Alphabit and Digital Strategies. However, the platform’s native token, YLD, has plummeted 58% in the last 24 hours since the news broke.

Background to the Yield App

According to the official statement, Yield App’s portfolio losses were due to third-party hedge fund managers holding the platform’s assets on FTX, which is currently embroiled in an ongoing litigation. CEO Tim Frost stated that the company is pursuing litigation against several hedge funds that have suffered losses. After 18 months of remediation efforts, the decision was made to close the platform in the best interests of creditors, allowing administrators to pursue claims directly.

Despite the announcement, previous statements from Yield App have raised questions about its transparency regarding involvement in the FTX collapse. In a Discord message on November 10, 2022, Frost assured users that the company had “no significant involvement in FTX.” However, he later clarified that while Yield App itself had no direct involvement, indirect involvement via fund managers came to light much later and led to the current court case.

In 2024, the bankrupt crypto exchange was involved in several sales of receivables and assets as part of its bankruptcy proceedings. In February alone, FTX sold 8% of its stake in artificial intelligence firm Anthropic, sold its European arm for $33 million, and planned to sell Digital Custody for $500,000.