Overview
- New York Attorney General Letitia James reached a settlement that directs more than $5 million to customers who used CredEarn, with any money Uphold later recovers from Cred’s bankruptcy also going to investors.
- From January 2019 to October 2020, Uphold promoted CredEarn in its app as a safe way to earn interest, and the state says customers were told Cred had comprehensive insurance that did not exist for retail crypto losses.
- Investigators say Uphold failed to disclose that Cred funded yields with risky loans to borrowers in China, including low-income video game players with no credit histories.
- Cred started posting lending losses in March 2020 and filed for bankruptcy later that year, which left thousands of users with losses after moving assets into CredEarn.
- The Attorney General also cited Uphold for operating without required registration under New York’s Martin Act, and Uphold disputes the findings as New York steps up cases that now include court fights with Coinbase, Gemini, and the CFTC.