CRED: Fraud and Bankruptcy
CRED, a cryptocurrency lending platform and the creation of decentralised financial products, has filed for bankruptcy.
In light of the recent events related to internal fraud, resulting in problems with the balance, CRED stopped the deposit and withdrawal of funds from clients associated with the CredEarn service and initiated bankruptcy proceedings. The CredEarn service allows owners of digital currency to receive dividends in exchange for a deposit (granting a loan) on the platform.
In a press release, Cred announced the start of bankruptcy proceedings. The purpose of the procedure is to consider possible alternatives for business restructuring or the possibility of selling as a going concern. Cred on restructuring issues, brought in Paul Hasting as legal advisor and MACCO Restructuring Group for financial advice.
Uphold, a trading platform that worked in partnership with CRED, ended all joint activities and also removed Cred CEO Dan Shutt from the board of directors. Uphold has released a statement saying:
`` Balance problems could have arisen due to the actions of the former head of Cred ''
Uphold has filed charges against CRED for breach of contractual obligations and for breach of obligations assumed in carrying out professional activities for the benefit of another person. Having communicated the intention to sue Cred LLC as a legal entity, subsidiaries, and also against the founder of the company for fraud, breach of contract and damage to reputation.
CRED has filed with the Delaware District Court for bankruptcy protection. The statement refers to debt in the amount of $100 million to $500 million, with own assets worth $ 50 million to $100 million. The amount of losses will be clarified after an investigation initiated by CRED. Law enforcement agencies are investigating fraud. The company representatives also announced an internal audit, a detailed report on which will be provided in the near future. He added that customers' personal information and financial data were not affected.