🌎 Yield App Shuts Down Amid FTX Collapse-Related Losses

Yield App, a crypto wealth management platform backed by AGE Crypto and Alphabit, has announced its shutdown following losses linked to the collapse of FTX. The platform shared this news in a June 28 post, stating the closure of all activities as it prepares to enter liquidation proceedings.

Suspension of Platform Activity

On June 28, 2024, Yield App Ltd, a Seychelles-incorporated limited liability company, announced the suspension of all activity on its digital wealth platform. The firm is now focusing on retrieving funds stuck on the FTX crypto exchange.

Founded in 2020 by Tim Frost, Justin Wright, Jan Strandberg, and Jason Corbett, Yield App marketed itself as a “one-stop crypto wealth platform where you can earn interest, buy, and swap between your cryptocurrency assets.”

In their announcement, Yield App asked for the patience of its customers as it works with advisors to release further information, including detailed FAQs, at the earliest possible date.

Reasons Behind the Shutdown

Yield App attributed the decision to portfolio losses incurred through third-party hedge fund managers who held Yield App assets in custody on the collapsed cryptocurrency exchange FTX, which is subject to ongoing litigation. Although the firm didn’t disclose the name of the hedge fund, earlier reports suggested that Yield App’s funds might be trapped on FTX due to mismanagement by Swiss hedge fund Tyr Capital Partners.

Reportedly, Tyr Capital Partners ignored internal risk limits and investor warnings regarding its exposure to FTX. While Yield App wasn’t a direct client of Tyr, it was a client of TGT, a fund whose directors included Yield App co-founders Wright and Corbett, which had invested with Tyr on Yield App’s behalf.

Impact of FTX Collapse

FTX collapsed in November 2022 amid allegations of embezzlement and misappropriation of billions of dollars in customer funds involving its owners and affiliated hedge fund Alameda Research. Sam Bankman-Fried, the founder of the exchange, was sentenced to 25 years in prison and ordered to reimburse $11 billion.