- The pressure on Freeway Finance has grown since it halted withdrawals last week
- Prominent members of the crypto community have called it out for being a Ponzi scheme
- The platform offers up to 43% interest on investments
Pressure is growing on Freeway Finance, a crypto platform that claims to offer up to 43% interest, after it halted withdrawals last week. Freeway blamed the halt on recent “unprecedented volatility in foreign exchange and cryptocurrency markets”, but others, most notably Twitter user and Terra tormentor-in-chief FatMan (@FatManTerra), claim that the operation is a Ponzi scheme and have advised anyone holding money on the platform to withdraw it the moment they can.
Freeway Finance Blocks the Road
Freeway Finance launched in mid-2019 as an interest generator, with users able to choose ‘Superchargers’ which it says are simulations of popular crypto and fiat currencies that can earn up to 43% interest per year. This offer has remained in situ during the bear market while other lending platforms were taking steps to mitigate their outgoings (or in some cases capitulating entirely).
Freeway continued with its offering, seeming to navigate the bear market, but on Sunday this all came to an end when it announced in a tweet thread that it was halting its superchargers in order to “manage exposure to future market fluctuations and volatility ensuring the long term sustainability and profitability of the Freeway Ecosystem.”
This prompted FatMan to issue a warning that anyone with money in the Freeway ecosystem should consider withdrawing before the worst happened:
If anyone has funds in crypto yield platform Freeway, I would suggest withdrawing right away. I believe they are operating a Ponzi scheme. In my opinion, it’s likely that Freeway will collapse within the next few months and that all depositors will lose everything.
— FatMan (@FatManTerra) October 22, 2022
Unfortunately, three days later, the next shoe dropped as Freeway halted withdrawals, blaming the volatility in the foreign exchange and crypto markets for one of its strategies failing, which caused it a significant loss:
The following is our understanding:
One of Freeway’s trading strategies appears to have failed and caused a substantial loss to be incurred due to unexpected market volatility.
2/22
— Freeway (@FreewayFi) October 25, 2022
However, this excuse didn’t ring true with observers who pointed out that there has been very little volatility in the crypto markets for some months, and also that the “unprecedented USD rally” it also blamed has been in play for over two years.
This led to FatMan, among others, pointing out that this was simply the next step on the path to total collapse, while followers in the Freeway group threatened legal action:
Freeway Ponzi scammers threatening legal action for calling them a Ponzi. I’ve received several death threats as well. Naturally, it’s time to turn it up.
This disgusting, heartless scam requires far more publicity. High-reach documentary makers & reporters, please get in touch. pic.twitter.com/BkJJyFzf1P
— FatMan (@FatManTerra) October 27, 2022
Only time will tell whether Freeway can come out of this or not, but we have seen many, many times in the past that people can become blinded to the reality of a crypto investment scam and will ignore red flags until it is too late.
