Nexo

Start Earning Up to 16% Interest Automatically

Learn More
Home » Business » Uphold Files Lawsuit Against Cred After Bankruptcy Announcement

Uphold Files Lawsuit Against Cred After Bankruptcy Announcement

by

Uphold has announced its plans to sue Cred following the lending provider’s application for bankruptcy. Uphold was partnered with Cred via its wallet, but recently discontinued the relationship amid a wave of fraudulent activity.  

Craig Wright of Bitcoin SV Won't Escape Latest Crypto Lawsuit

Key Takeaways

  • Cred filed for bankruptcy yesterday, following multiple breaches of contract and fraudulent activity among founders. 
  • Uphold plans to take Cred to court over allegations, pledging to return lost funds to affected Uphold users.
  • The latest update follows Uphold cutting all ties with Cred and its CEO, Dan Schatt.

Share this article

Following Cred’s bankruptcy announcement, Uphold announced its plans to take the lending service to court to recover lost users’ funds. 

Uphold Takes Cred to Court

Uphold is a popular cryptocurrency wallet that was partnered with Cred but recently discontinued its relationship after learning of the company’s fraudulent activity. According to the bankruptcy application, Cred owes approximately $67 million in unaccounted funds. 

Announcing the news via its website, the company stated: 

“In breach of its contractual and fiduciary responsibilities, Cred failed to inform Uphold about the issue until Uphold contacted the firm on Friday, October 23rd, having been approached that day by a journalist investigating potential issues at Cred. As a result, Uphold today announces that it plans to sue Cred LLC, the corporate entity, its affiliates, as well as Cred’s founders for fraud, breach of contract, and reputational damage.” 

The company has stated that any money raised through the lawsuit fill be given to users who lost funds via Uphold’s partnership with Cred. The company has since declared that it takes no responsibility for the incident. 

Cred’s CEO Dan Schatt was also ousted from Uphold’s board of advisors due to the fallout. 

The first hints of trouble came on Oct. 29, when Cred suspended all withdrawals and deposits linked to its interest-bearing service CredEarn. 

https://twitter.com/ihaveCred/status/1321637391069671424?s=20

Cred later revealed to Coindesk that it had “experienced irregularities in the handling of specific corporate funds” due to a fraudulent insider. Uphold also supported the allegations, referencing a team member involved in “stealing money and making bad investments.”  

It’s unknown how many users were affected and the value lost as a result of the activity. More details should surface when the case goes to trial. 

Share this article

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

Crypto Briefing may augment articles with AI-generated content created by Crypto Briefing’s own proprietary AI platform. We use AI as a tool to deliver fast, valuable and actionable information without losing the insight - and oversight - of experienced crypto natives. All AI augmented content is carefully reviewed, including for factural accuracy, by our editors and writers, and always draws from multiple primary and secondary sources when available to create our stories and articles.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.