Yield App Halts Operations Amidst FTX Collapse Fallout
In a developing story, Yield App Ltd, a Seychelles-incorporated crypto investment platform, announced on June 28, 04:15 UTC, that it would immediately halt all operations on its platform. As stated in an official announcement, the decision was made to “ensure fair and equal treatment for all Yield App’s users and stakeholders.”
The FTX Connection
The sudden suspension of activities by the Yield App is linked to the collapse of the cryptocurrency exchange FTX. Yield App realized portfolio losses due to third-party hedge fund managers that held Yield App assets in custody on FTX. These assets are now “subject to ongoing litigation.” The fallout from FTX’s troubles has had a cascading effect on Yield App, leading to the suspension of its services.
Despite previous assurances of no significant impact, Yield App has now admitted to losses from FTX exposure. This revelation has cast doubt on the company’s transparency regarding its exposure to the FTX collapse. In a Discord message dated Nov. 2022, Yield App CEO Tim Frost reassured users that the crypto investment firm had “no significant exposure to FTX.”
Why the Suspension?
The decision to halt operations was made to ensure “fair and equal treatment for all Yield App’s users and stakeholders.” Yield App’s management took this step to protect investors and maintain transparency during a challenging period. By suspending activity, they aim to prevent further losses and provide clarity to their community.
The Impact on Users
The situation has left many in the crypto community puzzled. An anonymous source expressed confusion at the situation, stating, “This whole thing doesn’t make any sense. I think it’s super weird they got affected by FTX when it’s already 2 years ago, and they gave an official statement.”
Investors who trusted Yield App with their funds now face uncertainty. The platform’s suspension means users cannot access their assets or engage in further transactions. While Yield App has closed its community channels, a support channel remains open via its official website. Users can seek assistance and stay informed about developments and the future of the Yield App.
FTX’s Troubles
In the aftermath of the FTX collapse, the bankrupt crypto exchange has seen multiple sales of claims and assets and has 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.
At the time of writing, the Yield’s native token, YLD, is down 55% over the past 24 hours on the heels of the news.
Yield App’s decision to prioritize fairness and stakeholder protection is commendable, but it also highlights the challenges crypto platforms face in an ever-evolving landscape.
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