Crypto investment platform Freeway has suspended access to yield-generating lending products for its clients, the firm said on Sunday, the latest sign of strain in the crypto sector.

Freeway, a crypto lending company that offers interest-bearing cryptocurrency accounts, announced late Sunday that it has halted trading services for its users due to extreme market conditions.

Freeway said the move was due to the extraordinary ongoing volatility in the forex and cryptocurrency markets and said he will now focus on ensuring the sustainability of his business. The lender said that he therefore decided to diversify his asset base to manage exposure to future fluctuations and market volatility to ensure the long-term sustainability and profitability of his ecosystem.

The announcement has caused a significant drop in the value of its native token. The Freeway Token (FWT) has plunged more than 80% in the last 24 hours, and users in the Telegram community do not understand what is really happening. At the time of writing, the Freeway token was trading at $0.001498, down 76.41%, according to CoinMarketCap. Freeway responded that it will notify its customers when it is ready to restart commercial services.

With this, Freeway joins major crypto lending platforms like Voyager Digital, Celsius Network LLC, and Babel Finance, among others, in suspending trading and withdrawals. Like the firm, other platforms that have suspended user withdrawals cited facing “unusual liquidity pressures” as the reason for freezing their trades.

Previously, digital asset values ​​have been falling in response to the US Federal Reserve raising policy interest rates to keep rising inflation in check, thereby draining excess liquidity from the market.

The many cases of crypto lenders being squeezed by spiraling crypto prices point to crypto being a highly leveraged asset class. In June, a Singapore-based hedge fund, Three Arrows Capital (3AC), saw its assets under management drop by more than 70% due to its heavy investments in the collapsed TerraUSD stablecoin. This led to a spillover effect causing Voyager Digital, Celsius Network and many others to suspend trading, deposits and withdrawals.

As a result, several regulators are considering the introduction of additional safeguards for consumer protection. In July, the Monetary Authority of Singapore proposed new rules, such as putting limits on retail participation and rules for the use of leverage when transacting cryptocurrencies.

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