Alleged DeFi rug pull information surfaced around the same time that cryptocurrency platform Freeway said it will stop offering deposit and withdrawal options.

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News in a Glimpse:

  • Freeway is ending its withdrawal and deposit services, blaming it on the turbulence in the cryptocurrency and currency markets.
  • Following the statement, it was seen that the price of the company’s token, FWT, dropped by almost 80% less.
  • They also state that until their new tactics are put into practice, purchases of Supercharger simulators will be temporarily halted.
  • The details of the aforementioned new strategies were inaccessible, and the team members whose identities were gradually taken down from the website are unable to provide any more commentary.

The crypto staking platform Freeway formally declared last October 23 that it is discontinuing its withdrawal services, citing volatility in the crypto and currency markets as the cause. The statement caused the price of its token FWT to fall and tumble, where it went for around 80% less following the announcement.

Before the announcement, Freeway had a market valuation of around $70 million, which is rather excellent for a relatively unknown enterprise. However, it is now worth $10 million at current market values after collapsing. However, according to a statement published on its website, Freeway has $160 million in total worth locked up.

According to on-chain statistics, the majority of the 4,342 token holders received their respective FWT during an airdrop, while the remainder was idle. Prior to the Sunday announcement that resulted in the catastrophe, the biggest whale on the site allegedly lost more than $16,500. FatManTerra, a Twitter personality, said that the Freeway website was in the process of erasing the identities of their various team members.

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The Halting Announcement

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Freeway was formerly marketed as having the ability to mix the best of traditional finance with the best of decentralized finance (DeFi). However, a lot was surprised when the said crypto platform announced on Sunday that they are suspending purchases and deposits in their services owing to “exceptional volatility” in the foreign exchange and cryptocurrency markets in “recent times.”

In addition, they declared that purchasing Supercharger simulations would be temporarily suspended until their new strategies are executed. These Supercharger simulations generated a lot of news during the project’s marketing time since they promised to be able to give up to 43% yearly yield incentives. This essentially meant that consumers could deposit fiat money and cryptocurrency into their respective licensed brokerage accounts, where the funds would be leveraged for profits.

The specifics of the aforementioned new tactics were unavailable at the time of writing, but their initial statement included goals for diversifying their asset base as well as minimizing exposure to future market changes and volatility.

The message did not address the potential consequences for both the platform and its respective users following the suspending of services; nonetheless, it concluded with a pledge to keep users and the whole community updated as soon as feasible. Users will be alerted whenever Freeway is ready to resume partial and full Supercharger simulation purchases, as well as deposits and purchases of services for their FWT token.

FWT Token Crashing Down

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According to the source, the crypto platform’s native coin FWT has crashed by more than 80% in the last 12 hours. Prior to the notification of the service suspension, the token was found to be trading at $0.007.

However, once the statement was made, the price sank by $0.001 on Monday morning and has not recovered at the time of writing. FWT is presently 96% lower than its all-time high of $0.031 in May 2021. Its market capitalization is not $8.5 million.

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Freeway – Another DeFi Rugpull?

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Freeway once boasted that through its ‘Superchargers,’ or virtual simulations, customers could earn up to 43% APY, with the same yield-generating items also being able to be sold back on the Freeway platform.

However, a recent stunning revelation from the crypto platform claimed that they would cease purchasing the aforementioned items until their new tactics are implemented; this action has been interpreted as a red warning by many consumers. Another red flag is that the team plainly indicated in the statement that they cannot comment on this matter any more until their procedure was concluded.

A Twitter user also noticed that the identities of the team members were progressively being removed off the crypto platform’s website, and he speculated that Freeway may be another $100 million rug. Furthermore, this person has characterized the cryptocurrency platform Freeway as a Ponzi scheme and has advised customers to remove their assets. The abovementioned notice was apparently placed on October 22, a day before the Freeway’s service suspension announcement.

In fact, according to a different report, a member of the team was reported to have entered Telegram and informed customers that they were unsure whether they would be allowed to withdraw cash and even recommended them to open a support request. People in the Freeway group, according to one user, are still stunned and in denial that they have lost everything in this business and are not ready to accept that truth.

Interestingly, the project’s co-CEO, Sadie Hutton was still seen to have been positive about this platform in the beginning of October. In a YouTube presentation she claimed that Freeway stood poised to end 2022 “with a bang” despite the looming global recession and high levels of inflation.  Furthermore, she even highlighted one of their alleged milestones wherein, they have recorded a net positive growth of $1.8 million in users’ Superchargers in this year’s third quarter. However, these claims do not seem to have been reflexive on the recent announcement that the platform has done and may even be added to the list of rug pulls in the Web3 space.

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