Why Freeway, the crypto platform that promised crazy returns… prevents you from withdrawing your money?

Freeway, the UK cryptocurrency investment platform which promised insane returns, considerably limited the possibilities for its users to withdraw their money.

This is far from the first time this year that investors consider themselves victims, rightly or wrongly, of cryptocurrency promoters. The burgeoning scandal around the UK platform, in many ways, pushes the boundaries of the industry, and there is no excess into which its creators do not seem to have fallen.

What is Freeway?

“ Earn up to 43% annual interest rate. That’s the promise decentralized finance platform Freeway makes to people who visit its homepage. A catchphrase followed by another commitment: ” We are shaking up finance to give more to everyone. More access. More control. More rewards. To achieve such performance, the platform puts forward a system of “ superchargers which involves depositing tokens into a crypto pool and receiving rewards for doing so. In theory, users can recover the assets thus deposited at any time. Freeway has also created its own corner, the FWT.

But, as often in the world of finance, the promises of disproportionate returns hide a wolf, and Freeway does not a priori no exception to the rule. This Sunday, the platform posted a message on Twitter indicating that the company was simply suspending the possibility for its users to recover their tokens. It justified this decision by the unusual volatility of its assets and specified that it intended to resume normal business as soon as possible.

A risky investment… or a scam from the start?

The decentralized asset market has never been a model of stability, but the crash of May 2022 has further accentuated this trend. And now, investors in the middle are watching for the slightest sign of weakness to massively disengage. And it did not fail for the FWT, which lost no less than 80% of its valuation in the few hours following the announcement.

This case recalls the fate of Celsius, a crypto lending agency which also froze withdrawals on its platform last June before filing for bankruptcy a month later. This is a grim prospect for users, who cannot recover their deposits. Perhaps more worrying for them, but also more interesting for justice, the site of the platform would have already started to clean up its public organization chart by erasing the names and job descriptions of several senior executives on its site… This n is never a good sign.

Freeway’s model had, from the start, raised many eyebrows among financial and cryptocurrency analysts. Some even called it a Ponzi scheme. Pessimists, few were those who saw the platform end the year 2023. It will not even have to wait until then.

Sources: Gizmodo, Freeway, Corner Newspaper