Crypto Yield Platform Freeway Halts, Token Tanks 75%
Freeway, which offers users up to 43% returns via staking rewards, has suddenly halted services on its platform and left users out of pocket
Source: DALL·E 2
key takeaways
- Freeway claims a total of $161 million in so-called “Superchargers” currently reside within its ecosystem
- Users have been barred from withdrawing funds with no timeline offered for when services will restart
Crypto investment startup Freeway has suspended service in response to “unprecedented” volatility in foreign exchange and crypto markets, again calling into question the long-term viability of centralized platforms offering high yield.
The Seychelles-registered platform tweeted Sunday it would not be buying back users’ Supercharger Simulations — financial products that offered users up to 43% yield — until further notice.
“Freeway has therefore decided to diversify its asset base to manage exposure to future market fluctuations and volatility ensuring the long term sustainability and profitability of the Freeway ecosystem,” the platform said in its tweet and via a website notice.
Freeway’s native token FWT dropped more than 75% following its decision to suspend its platform, now down 96% since its peak last May.
No further information was provided with regard to exactly how Freeway would diversify its asset base. A spokesperson for Freeway was not immediately available for comment.
The move echoes those made by now-bankrupt crypto lenders Celsius and Voyager — some of the largest in the space — as they went into a tailspin earlier this year.
Typically, users stake crypto or fiat with Freeway and buy so-called “Superchargers,” which can then be sold back at a later date, unlocking yield and the initial funds. The IOUs are meant to emulate crypto and fiat currencies such as bitcoin and USD.
Now, users are unable to sell their Superchargers back to the platform, which is still in beta. Freeway claims $161 million in Superchargers currently reside within its ecosystem.
Under the platform’s terms and conditions for non-US users, Freeway advises new signups that the platform “may be down for a limited or extended period of time,” such as maintenance and upgrades.
No clear road for Freeway
Freeway is yet to give a timeline for when it might reinstate services, leaving users stuck without much recourse. Prominent crypto commentator FatMan tweeted to highlight that Freeway had also scrubbed team member names from its website.
A representative on Telegram told users they did not know if they would be able to withdraw funds and advised them to submit a support ticket.
“Freeway collapsed and I’m just wondering if I will still manage to be one of the last to withdraw. People here are still in denial that they lost everything and should face it straight away,” one disgruntled user said.
At the beginning of this month, the project’s co-CEO, Sadie Hutton, said in a YouTube presentation that a looming global recession and high levels of inflation had dogged markets, but Freeway stood poised to end 2022 “with a bang.”
Hutton said the platform had posted a net positive growth of $1.8 million in users’ Superchargers in the third quarter of 2022.
“When you consider the price of bitcoin dropped over 30% in the month of June alone, is a very strong signal to our community and to anyone looking for projects standing strong amid the bear market turmoil…Freeway has a very clear runway ahead.”
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