By Key Points
- Amidst liquidation proceedings, Yield App halts all activities on its platform.
- While community channels are suspended, the support channel will still be open for use.
- The main reason behind this is the portfolio losses from FTX collapse.
- In the past day, the YLD token has dropped by 58%.
In a statement issued yesterday through its website, Yield App announced that it would suspend all platform operations immediately as it entered into liquidation proceedings. This sudden move was occasioned by large portfolio losses following the collapse of the FTX cryptocurrency exchange.
The assets of Yield App were held in custody by third-party hedge fund managers at FTX and these assets are now subject to ongoing litigation which has tied up this money.
Also according to the site, all forms of communication from outside sources about the Yield App will be halted except one channel that assists people accessing customer care services. A huge message about stoppage also comes out when you visit their website.
Yield App suspends activity and enters liquidation proceedings, citing FTX collapse https://t.co/SvP0ucuJcy
— The Block (@TheBlock__) June 28, 2024
Impact of the FTX Collapse
Regarding an announcement made through social media platforms recently, Yield App said that “this decision has been taken to ensure fair and equal treatment for all Yield App’s users and stakeholders.” This follows a recent blog post by the platform on June 25th which gave no such indication that drastic steps were going to be taken.
This suspension serves as a way to mitigate effects emanating from FTX failure which significantly affected Yield app’s book value. Continued uncertainty over the recovery of these assets concerning ongoing litigation against FTX has necessitated liquidation hence this entails dealing with financial difficulties surrounding them.
User Reaction and Market Impact
The company urged its membership base to underline the need for patience during this time as they try sorting things out. As further information becomes available, Yield App will release it accordingly.
For example, in the last 24 hours, the price of YLD tokens has plummeted by 58%. Because of the indefinite suspension of operations on its platform and a doubtful fate for its assets, this substantial decline reflects market reaction.
For example, Yield App raised almost $5 million in a hybrid funding round including Alphabet and Digital Strategies as lead investors in 2020. This marks a significant twist for Yield App users and investors following their abrupt end to business activities.
As this unfolds, many will be eager to know how Yield App manages its liquidation process while other platforms in similar situations concerning FTX debacle will be keen to see what happens.
What's your reaction?
