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Crypto staking platform Freeway pointed at the failure of one of its trading strategies, along with market conditions as the leading reason for halting user withdrawals earlier this week.<\/p>\n
The crypto yield platform on Oct. 23 announced it was halting\u00a0various transactions relating to its high-yield \u201cSupercharger\u201d product<\/a>, citing \u201cunprecedented volatility\u201d at the time, without giving any more details at the time, which saw its token price plummet.<\/p>\n In a 22-part Twitter thread on Oct. 25, Freeway\u00a0shed<\/a> more light on the situation, revealing that it was \u201cone of Freeway\u2019s trading strategies\u201d that \u201cappears to have failed\u201d and has \u201cdramatically impacted Freeway\u2019s portfolio\u201d and caused a \u201csubstantial loss\u201d to its investors.<\/p>\n Freeway explained that an unprecedented rally of the United States dollar, along with crypto volatility led to the failure of the trading strategy.\u00a0<\/p>\n \u201cThe trading strategy was executed as it was programmed, but the market volatility caused a spike in margin utilization leading to the loss,\u201d it explained.<\/p>\n The platform offers users up to 43% annual yield wards using its \u201cSuperchargers\u201d products. Users can deposit fiat currencies and crypto, which are placed in regulated brokerage accounts that are leveraged for returns.<\/p>\n However, the firm said earlier this week it would be halting buys and deposits and won\u2019t be buying back Superchargers until its new strategies are implemented. <\/p>\n Related: <\/em><\/strong>What are DeFi yield aggregators, and how do they work?<\/em><\/strong><\/a><\/p>\n In the new post, Freeway said it would be enacting a recovery plan to improve and secure its remaining funds. <\/p>\n The plan would involve bringing in \u201cnew expertise\u201d to improve the management of its remaining funds, alternative diversification opportunities for investors, deploy a new product with \u201cimpressive projected profitability\u201d (although details have not yet been announced), along with a new \u201cEarn and Protect\u201d feature that gives greater user protection. <\/p>\n The platform has also confirmed that they had moved out of the \u201closs-producing\u201d strategy.<\/p>\n \u201cIn 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.\u201d<\/p><\/blockquote>\n News of Freeway’s service halt caused its FWT<\/a> token to plummet 81% to approximately $0.00134. The token is currently priced at $0.00152, according to CoinGecko.<\/p>\n<\/div>\n