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Yield App has announced that it has halted all activity on its crypto investment platform with ‘immediate effect’ after admitting it had lost funds on FTX a year and a half after it collapsed.
The company said its assets were held by a series of third-party hedge fund managers that were using FTX as custody. As a result, it says it’s preparing to enter liquidation and is in the process of taking legal action against the managers.
In a statement, Yield said, “This decision has been made to ensure fair and equal treatment for all Yield App’s users and stakeholders.”
Previously, Yield had claimed that deposits made on its platform were ‘always safe‘ and even claimed “your funds are insured.” It’s not clear how these issues could endanger deposits that are both always safe and insured.
Read more: FTX chasing $5M spent on ‘right-wing’ conference venue
Despite this liquidation announcement that claims it involves “the suspension of all activity,” the Angel Launchpad operated by Yield still lists a project meant to launch next week.
Yield is a Seychelles-incorporated firm that offers various crypto trading activities. Its post today may be referring to hedge fund management firm Geneva-based Tyr Capital Partners, which was sued in February 2024 by TGT, a fund that invested with Tyr, for allegedly ignoring internal risk limits and investor warnings regarding FTX.
The Financial Times reports that TGT is trying to recover $22 million from Tyr that was lost to FTX.
FTX, under the leadership of Sam Bankman-Fried, filed for bankruptcy almost two years ago on November 11, 2022. FTX reportedly claims it will have $16.3 billion — after selling its remaining assets — to pay its debts of roughly $11 billion. Both FTX US and Yield were previously audited by Armamino LLP, which no longer offers auditing services.
As part of this asset recovery, FTX is chasing $5 million from a former hotel that hosted various right-wing fringe groups. Recovery plans have also been put in place for FTX creditors which stretch the semantics of a ‘full recovery,’ prompting one group to sue the collapsed exchange.
One firm that was successful in recouping its FTX losses was European investment firm CoinShares which managed to sell its $33.6 million FTX claim to a mystery buyer.
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