The crypto wealth management platform Yield App, backed by AGE Crypto and Alphabet, has said it will shut down soon because it lost a lot of money when FTX, a big cryptocurrency exchange, went down.
Tim Frost, Justin Wright, Jan Strandberg, and Jason Corbett started the Yield App in 2020. They saw it as a complete tool for managing crypto wealth, with services like earning interest, trading assets, and swapping cryptocurrencies. However, in a statement released on June 28, the platform said it would stop all operations as it prepares to go into bankruptcy.
Crypto Platform Yield App’s Closure Amid FTX-Linked Losses
Due to big stock losses caused by third-party hedge fund managers, the company has decided to shut down. When FTX went down because of claims of financial misconduct, these managers had control of Yield App’s funds. Yield App said in its statement that the choice to go bankrupt was based on ongoing litigation related to the collapse.
Even though Yield App didn’t say which hedge fund was involved, earlier reports said that its money was trapped because of what Tyr Capital Partners did. Tyr Capital Partners is a Swiss hedge fund that is accused of breaking risk limits and ignoring investor worries about its exposure to FTX. Yield App wasn’t Tyr’s direct client, but it was connected to Tyr through TGT, a fund run by Wright and Corbett, who invested with Tyr on Yield App’s account.
People say that FTX’s owners and related companies, like Alameda Research, stole billions of dollars in customer funds and used them for personal gain before it went out of business in November 2022. Since then, FTX’s founder, Sam Bankman-Fried, has been given a 25-year prison term and told to pay back $11 billion.
Yield App’s shutdown shows how FTX’s failure affected its clients and related businesses. It also shows how complicated the law is in the cryptocurrency sector.
