Cause Of Freeway’s Withdrawal Halt Is “Failed” Trading Strategy
The company had to cease operations early this week, according to the cryptocurrency yield platform, since one of its trading techniques “appears to have failed.”
Crypto staking site Freeway halted customer withdrawals earlier this week, citing the failure of one of its bitcoin trading techniques and market circumstances as the primary cause.
The crypto yield platform stated on October 23 that it was blocking transactions related to its high-yield “Supercharger” product, claiming “unprecedented volatility” at the time, without providing any specifics at the time, causing its token price to fall.
In a 22-part Twitter thread published on October 25, Freeway said that “one of Freeway’s trading techniques” “appears to have failed” and has “dramatically impacted Freeway’s portfolio” and resulted in a “substantial loss” for its investors.
Freeway claimed that the failure of the trading method was due to an exceptional surge of the US currency and crypto volatility.
“The trading strategy was executed as it was programmed, but market volatility caused a spike in margin utilisation that leading to the loss,” the report noted.
Using its Superchargers products, the platform gives consumers an annual return of up to 43%. Users may deposit fiat and cryptocurrencies, which are then put in regulated brokerage accounts with leveraged returns.
Nonetheless, the company said earlier this week that it would cease purchases and deposits and will not buy back Superchargers until its revised initiatives are implemented.
Freeway said in a recent article that it would implement a recovery strategy to strengthen and safeguard its residual finances.
The plan entails bringing in “new expertise” to improve the management of the company’s remaining funds, providing investors with alternative diversification opportunities, deploying a new product with “impressive projected profitability” (although specifics have not yet been disclosed), and introducing a new Earn and Protect feature that provides greater user protection.
In addition, the platform has verified that they have abandoned their “loss-producing” strategy:
“In order for us to resume Supercharger buy-backs we need to be in a position to execute safely. We will therefore need to see significant inroads into the losses before that can happen, and that will take time.”
The Freeway (FWT) token plummeted 81%, or around $0.00134, upon hearing the news of the service discontinuation. Currently, the token is valued at $0.00152, according to CoinGecko.
