The UK-based cryptocurrency platform Freeway, which gave users up to 43% returns through so-called “Supercharger simulations,” has been called a “$100m+ rug” after it stopped all withdrawals and took off its website information about its executives.
The website says that the assets of these Supercharger simulations are worth more than $161 million. Freeway users buy Superchargers in order to get rewards, and they were supposed to be able to cash them out through a buy-back system that was shut down yesterday.
Freeway said it was taking these steps because of “unprecedented volatility in Foreign Exchange and Cryptocurrency markets in recent times.” It did this on Twitter and through a pop-up on its website. The message says that Freeway will “allocate capital to its underlying portfolio” to keep yields up and that buybacks will not be honored “for a temporary time.” It also says that an update will be coming soon.
On Saturday, an anonymous Twitter account called FatManTerra sent out a warning. Since the Luna/UST collapse in May, FatManTerra has gained over 100,000 followers.
There may have been a bank run because of rumors about delays in large withdrawals. Freeway’s announcement that the buy-back was suspended came less than 24 hours after FatManTerra said it would in the “next few months.”
After the official announcement, the website was said to have taken down the profiles of the team members.
The news has not been well received by the market. In the last 24 hours, the platform’s own token, FWT, has dropped by more than 75%.
There are a lot of similarities between this event and the collapse of Celsius in June.
At one point, it was thought that users’ funds totaled more than $28 billion. Celsius stopped user withdrawals the day after former CEO Alex Mashinsky called concerns “FUD and misinformation,” even though millions had been taken out in the weeks before. After a month, the business filed for Chapter 11 bankruptcy.
