Yield App ceases operations, citing portfolio losses related to FTX collapse

Yield App Ltd, a Seychelles-based crypto investment platform, has announced the immediate cessation of all operations on its digital asset platform yield.app.

This move comes as the company prepares to initiate liquidation proceedings and aims to ensure fair and equitable treatment of all users and stakeholders.

Yield App ceases operations

The decision, which came into effect today, was announced in an official statement via a post on X. “Yield App Ltd, a limited liability company incorporated in Seychelles, announces today, Friday, June 28, 2024, the cessation of all activities on the digital asset platform http://yield.app as the company prepares to initiate liquidation proceedings,” the statement said.

The suspension follows significant portfolio losses by third-party hedge fund managers who held Yield App assets on the now-bankrupt cryptocurrency exchange FTX. These hedge funds are also involved in ongoing litigation.

Effective immediately, all activity on the Yield App platform will cease as the company consults with liquidators. Community channels will also be suspended, however a support channel will remain accessible through the Yield App to assist users during this transition period.

Yield App asks its customers to be patient and assures that further information, including detailed FAQs, will be provided as soon as possible.

The announcement sparked mixed reactions in the crypto community, with one user expressing disbelief, saying, “I can’t believe it. I thought you would survive the bear market and make a strong comeback. Why give up now when the bull market is only halfway through?”

Another commented, “I’m glad I withdrew my bitcoins a few months ago.” Overall, the mood was shocking, with many X users simply asking, “What?” Another user remarked, “What’s going on? This has to be a joke.”

Transparency of the Yield App questioned

The announcement has raised concerns about Yield App’s transparency, particularly in light of previous assurances regarding its involvement with FTX.

In a Discord message on November 10, 2022, Yield App CEO Tim Frost assured users that the company had “no significant involvement with FTX.” This statement has come under scrutiny following today’s revelations.

The liquidation of Yield App’s assets comes in the broader context of FTX’s bankruptcy proceedings. The failed exchange has been actively liquidating assets to resolve its disputes. In 2024 alone, FTX sold 8% of its stake in AI firm Anthropic, divested its European arm for $33 million, and planned to sell Digital Custody for $500,000.

The collapse of FTX had serious consequences for several companies. Last year, Galois Capital, a hedge fund founded by Kevin Zhou, closed its flagship fund due to significant holdings in FTX. The fund lost almost half of its capital in FTX’s collapse.