New York forces Uphold to pay $5M over fraudulent crypto investment scheme
New York Attorney General Letitia James has secured more than $5 million from cryptocurrency platform Uphold over its role in promoting a fraudulent investment product. The settlement centers around Upholds promotion of CredEarn, a product offered by Cred, LLC and its CEO Daniel Schatt. Between January 2019 and October 2020, the platform marketed CredEarn to users on its platform and mobile app as a safe, reliable savings product with attractive annual interest payments. However, Uphold didn‘t tell customers that Cred was generating those returns by making microloans to low-income video game players in China, who are typically borrowers with no credit histories and no access to traditional financial institutions, the Attorney General’s office said in an announcement. Source: NY AG James Uphold also told customers that Cred carried “comprehensive insurance,” a claim the Attorney Generals office found to be false. No such insurance protecting retail investors from digital asset losses existed in the industry at the time. On top of the misleading promotion, Uphold was operating without the required broker or commodity broker-dealer registration. Cred collapse hits Uphold users Cred began racking up losses from its risky lending practices in March 2020 and filed for bankruptcy eight months later, leaving thousands of Uphold customers around the