Crypto Lender Cred Files for Bankruptcy After Losing Funds in Fraud
In October, the lender published a cryptic letter saying it has experienced “irregularities” in the handling of “specific” corporate funds by a “perpetrator of fraudulent activity.”
Nov 8, 2020 at 7:17 p.m. UTCUpdated May 9, 2023 at 3:13 a.m. UTC
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Crypto lender Cred Inc. filed for Chapter 11 bankruptcy protection in Delaware on Saturday.
For more on Cred's bankruptcy, read this investigation published by CoinDesk on Nov. 12.
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- In its filing, Cred listed estimated assets of between $50 million and $100 million and liabilities between $100 million and $500 million.
- In an emailed press release, Cred said Grant Lyon has been named to the company's board to oversee the restructuring process. It has also hired MACCO Restructuring Group as financial adviser to evaluate M&A and other restructuring opportunities.
- In October, the lender published a cryptic letter saying it has experienced "irregularities" in the handling of "specific" corporate funds by a "perpetrator of fraudulent activity." In response, Cred said it had been advised by legal counsel to temporarily suspend inflows and outflows of funds relating to its CredEarn program.
- At the same time, wallet and trading platform Uphold told customers it had "decided to discontinue its relationship with Cred."
- Additionally, Uphold announced via a tweet on Sunday its intention to pursue legal reparations on behalf of its customers citing a "breach of contract, fraud and related claims."
- Cred may have already been in a tenuous position as several crypto lenders struggled to weather the bitcoin crash in March, with some making margin calls of $100 million or more.
- Cred CEO Dan Schatt did not immediately respond to a request for comment.
UPDATE (Nov. 8, 20:11 UTC): Adds assets/liabilities, new board member and hiring of restructuring firm.
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