Crypto wealth platform Yield App faces liquidation due to FTX-triggered losses

by

As a researcher with a background in the crypto industry, I’m saddened and concerned by the news that Yield App has announced its shutdown following losses linked to the collapse of FTX. This is yet another unfortunate example of how quickly things can turn sour in this fast-paced and complex market.

I’ve learned that Yield App, a crypto wealth management platform supported by AGE Crypto and Alphabit, has recently announced its closure. This decision came in the wake of financial losses sustained by the company due to the unfortunate collapse of FTX.

As a researcher investigating recent developments in the cryptocurrency industry, I’ve come across the unfortunate news that Yield App has announced the cessation of all activities. This decision comes as the company prepares to initiate liquidation proceedings in response to the aftermath of FTX’s collapse.

Suspension of platform activity ahead of liquidation proceedings

28 JUNE 2024, 04:15 UTC: Yield App Ltd, a Seychelles-incorporated limited liability company, is today, Friday 28 June 2024, announcing the suspension of all activity on the digital wealth platform…

— Yield App (@YieldApp) June 28, 2024

I was part of the team that established Yield App in the year 2020, alongside Tim Frost, Justin Wright, Jan Strandberg, and Jason Corbett. Our mission was to create a comprehensive crypto wealth platform where users could earn interest, purchase, and swap among their digital currency assets. However, currently, we find ourselves facing an issue as our funds are being held on the FTX cryptocurrency exchange.

“Please be patient, dear customers, as Yield App collaborates with its consultants to provide more details, such as comprehensive FAQs, at the quickest available moment.”

Yield App

As a crypto investor, I’ve come across an announcement from Yield App where they explained the reason behind some recent decisions. They pinned it on the portfolio losses we suffered due to third-party hedge fund managers. These managers had our Yield App assets under their care and unfortunately, they held those assets on the failed cryptocurrency exchange, FTX. And to make matters worse, these managers are currently embroiled in ongoing legal disputes.

Based on previous reports, it’s been speculated that Yield App’s funds could be affected by alleged mismanagement at Swiss hedge fund Tyr Capital Partners on the FTX platform. The specific name of the hedge fund Tyr Capital Partners was not revealed in the firm’s disclosure.

It’s alleged that Tyr disregarded the internal risk constraints and investor cautions concerning its involvement with FTX. Although Yield App wasn’t a direct customer of Tyr, it was a client of TGT, a fund managed by Yield App’s co-founders Wright and Corbett, who had invested with Tyr on behalf of Yield App.

In November 2022, FTX, a cryptocurrency exchange, faced accusations of misusing and mishandling approximately $11 billion in customer funds, with the owners and Alameda Research allegedly involved. Consequentially, Sam Bankman-Fried, the exchange’s founder, was sentenced to serve 25 years in prison and mandated to repay this amount.

Read More

2024-06-28 15:00