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Crypto staking and trading platform Freeway is being sued by users for unauthorized use of funds and misleading information, court filings show.

LedgerScore, LS Litigation Holdings, and Earn Guild, have filed a winding-up petition against AuBit, the parent company of Freeway, citing its inability to pay its debts and the numerous false claims made by AuBit to investors. These claims include that their funds were always available for withdrawal, insured, not collateralized, and EU-regulated.

AuBit has admitted that deposits on Freeway’s Superchargers were transferred to a brokerage account at Ardu Prime in AuBit’s own name, to get a credit line from Ardu, which was as high as $130 million in October 2022.

“[AuBit] has since admitted in the RO Petition that proceeds from the sale of Freeway’s Superchargers were transferred to a pooled brokerage account at Ardu Prime in the [AuBit]’s own name (not in investors’ individual names), and were allegedly leveraged by the [AuBit] to obtain lines of credit from Ardu Prime pursuant to which investors’ funds were held as collateral by Ardu Prime up to the value of the credit line (which was as high as USD 130 million in October 2022),” revealed Wyoming court documents.

AuBit blames Ardu Prime for its failure to process withdrawals since October 2022. AuBit claims it was defrauded by its joint venture partner Ardu Prime, a Greek brokerage. According to AuBit, Ardu Prime is apparently associated with fraudster Anthony Constantinou, who was convicted in the United Kingdom this year for defrauding investors in excess of $86 million (£70 million).

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