Companies
Freeway Crypto Exchange Reveals Major Problem and Proposes Recovery Plan
Following the recent indiscriminate halt of withdrawal and transactions on Freeway crypto exchange, the crypto staking platform has disclosed that the decision was taken due to the failure of one of its crypto trading strategies, as per a post.
The following is our understanding:
One of Freeway’s trading strategies appears to have failed and caused a substantial loss to be incurred due to unexpected market volatility.
2/22
— Freeway (@FreewayFi) October 25, 2022
The crypto yield platform maintains that the situation was also aggravated by the market conditions, thereby necessitating the sudden pause of withdrawals earlier this week.
Two simultaneous converging factors contributed to this: the unprecedented USD rally and crypto volatility.
3/22
— Freeway (@FreewayFi) October 25, 2022
Recall that On Oct. 23, the platform announced a temporary shutdown of withdrawal and transactions with no clear-cut reasons.
As all of you will be aware, there has been unprecedented volatility in Foreign Exchange and Cryptocurrency markets in recent times. pic.twitter.com/9aHsWbm1So
— Freeway (@FreewayFi) October 23, 2022
The decision was later justified by citing an incredible volatility in the foreign exchange and crypto market, by maintaining that the decision will hold until further notice, especially as regards supercharger high-yield products.
While this process is ongoing, Freeway will be allocating capital to its underlying portfolio and this means for a temporary time we will not be buying Supercharger simulations until our new strategies are implemented.
— Freeway (@FreewayFi) October 23, 2022
In the latest explanation provided by the platform, the staking hub reveals that the failure of the Freeway’s trading strategies greatly impacted Freeway’s portfolio and has led to a huge loss, especially to its investors.
While the platform holds to the fact that the trading strategy was carried out in line with how it was programmed, it was argued that market volatility turned on margin utilization, leading to a huge loss.
It is noteworthy that the platform offers up to 43% annual yield via its Superchargers products. In this regard, users can deposit either fiat currencies or crypto into designated brokerage accounts that are leveraged for returns.
Effects of Freeway Sudden Closure
The indiscriminate closure of Freeway exchange has impacted negatively on its native token. The native token of Freeway (FWT) has dropped over 80% since the announcement was made. It currently trades at $0.0014 according to CoinMarketCap.
Meanwhile, the decision has also generated skepticism and partial loss of confidence in the platform. A Twitter influencer FatManTerra discloses that the administrator of the Freeway website is in the process of deleting team names from the page.
Never forget these scammers (although I'll be surprised if at least one of them doesn't get plastic surgery) pic.twitter.com/Y0Ene9LBG9
— FatMan (@FatManTerra) October 23, 2022
Meanwhile, the exchange maintains that it will soon enact a recovery plan with a view to improving and securing its outstanding funds.
We are also bringing in new expertise to manage the remaining funds whilst we run multiple recovery plans in parallel, each, in our view, capable of recovering our position fully.
8/22
— Freeway (@FreewayFi) October 25, 2022
The exchange maintains that the new plan will revolve around improving the management of its remaining fund, alternative diversification opportunities for investors, among others.
