Finally, crypto asset management platform Yield App appears to be on its way to becoming the latest victim to succumb to the domino effect caused by the FTX collapse on June 28.

Yield App was founded in 2020 by Tim Frost, Justin Wright, Jan Strandberg and Jason Corbett. The company was marketing itself as a “one-stop crypto asset management platform where you can earn interest, trade, and exchange transactions on your crypto assets.”

Users could invest in Bitcoin, Ethereum and other popular cryptocurrencies on the platform and earn interest.

However, Yield App announced in an announcement on June 28 that “all operations have been suspended” and that it is “preparing to enter the liquidation process.” This unexpected decision worried cryptocurrency investors.

According to the company’s statement, this decision stems from “portfolio losses borne by third-party hedge fund managers who experienced the collapse of the FTX crypto exchange and are the subject of ongoing litigation.”

According to media reports, Yield App is trying to recover its funds stuck on the FTX exchange. The fact that the company did not disclose the name of the hedge fund raises suspicions. Previous reports suggested that Yield App’s funds may have been trapped on FTX due to “criminal” mismanagement by Switzerland-based hedge fund Tyr Capital Partners.

Tyr allegedly ignored internal risk limits and investor warnings regarding its exposure to FTX. This situation left both Tyr and the companies investing in its funds in a difficult situation. Yield App was not a direct customer of Tyr. However, he was a customer of the fund called TGT, which invested in Tyr on behalf of Yield App.

The board of directors of the TGT fund included Wright and Corbett, the founding partners of Yield App. This explains how Yield App was indirectly affected by the FTX crash.

While the collapse of the FTX exchange shook the environment of trust in the cryptocurrency market, it also revealed how interconnected cryptocurrency companies are. A stock market crash can create a domino effect and affect other players in the ecosystem.

This incident is a warning that cryptocurrency investors should more closely examine the reliability of the platforms they invest in and the names behind them. Investors need to question which hedge funds the platforms work with and how effective their risk management policies are.

While all this is happening, the future of the cryptocurrency market remains uncertain. The liquidation process of companies such as Yield App may damage investors’ confidence in cryptocurrencies.

However, the innovative potential of cryptocurrency technology cannot be denied. In the future, investor confidence may be restored with the emergence of more secure and regulated cryptocurrency platforms.