Freeway, a crypto-staking platform, reasoned its decision to halt user withdrawals to the failure of one of its trading strategies and market conditions. On October 23, the platform announced halting various transactions relating to its high-yield “Supercharger” product. Freeway had attributed it to unprecedented volatility without giving any more details. This led to its token price taking a dive.
Then on October 25, Freeway revealed that it was one of their trading strategies that failed and dramatically impacted the platform’s portfolio. It also caused a substantial loss to investors. It outlined that an unprecedented rally of the US dollar and crypto volatility resulted in the failure of the trading strategy. Freeway said the trading strategy was executed as it was programmed. However, the market volatility caused a spike in margin utilization leading to the loss.
Freeway offers users up to 43% annual yield wards using its Superchargers products. To take advantage of this, users have to deposit fiat currencies and crypto which are placed in regulated brokerage accounts that are leveraged for returns. But then the firm announced halting buys and deposits, and it will not be buying back Superchargers until its new strategies are implemented. Freeway will enact a recovery plan to improve and secure its remaining funds. The plan will bring in new expertise to enhance the management of its remaining funds, alternative diversification opportunities for investors, use a new product with impressive projected profitability, and a new “Earn and Protect” characteristic that gives greater user protection.
Moreover, Freeway has moved out of the loss-producing strategy. The platform needs to be in a position to execute safely in order to resume Supercharger buy-backs. As such, it needs to see significant inroads into the losses which will take time.