NY Attorney General Orders Uphold to Pay Over $5 Million in Restitution for Misleading Promotion of Crypto Investment Product
Odaily New York Attorney General Letitia James announced that crypto platform Uphold has been ordered to pay over $5 million in restitution to affected users for promoting CredEarn, a fraudulent crypto investment product. The investigation revealed that between January 2019 and October 2020, Uphold marketed CredEarn, launched by Cred LLC, as a "safe and secure" high-yield savings product, promising users "full insurance coverage," without disclosing that the returns were actually generated from issuing high-risk micro-loans to low-income gamers in China, and that the promised insurance coverage did not exist.
The New York Attorney General's Office also stated that Uphold did not obtain the necessary broker or commodity broker-dealer registrations while promoting this product. When Cred filed for bankruptcy in 2020, many users suffered losses. Under the settlement, Uphold will directly pay $5 million in restitution to affected users, and any future funds it recovers from Cred's bankruptcy proceedings, amounting to $545,000, will also be fully returned to the relevant investors. (ny.gov)
