Yield App, a Seychelles-incorporated crypto investment platform, announced on June 28 that it would halt all operations on its platform with immediate effect.
An official statement said that the decision “had been made to ensure fair and equal treatment for all Yield App’s users and stakeholders.”
“This follows the realization of portfolio losses incurred through third-party hedge fund managers that held Yield App assets in custody on the collapsed cryptocurrency exchange FTX, and who are subject to ongoing litigation.”
Related: FTX addresses transferred $8.3M one day before amended proposal deadline
What investors need to know
According to the official statement, Yield App realized portfolio losses due to third-party hedge fund managers that held Yield App assets in custody on FTX, which are “subject to ongoing litigation.”
Yield App has suspended community channels, but a support channel will remain open to the public via the official website.
Cointelegraph contacted Yield App’s representatives for more information but did not receive a response before publication.
Related: FTX petitions court to sell off $175M claim against DCG’s Genesis
Discrepancies in FTX exposure
Despite the announcement, previous statements from Yield App have cast doubt on the company’s transparency regarding its exposure to the FTX collapse.
In a Discord message dated Nov. 10, 2022, Yield App Tim Frost reassured users that the crypto investment firm had “no significant exposure to FTX.”
A source that wished to stay anonymous expressed confusion at the situation, telling Cointelegraph:
“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.”
Related: Small creditors put at risk by latest FTX bankruptcy development
FTX selloffs continue
This year, 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.
The ongoing asset liquidation efforts by the collapsed crypto exchange are part of its bankruptcy proceedings.
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