New York Attorney General Orders Uphold to Pay Over $5 Million in Restitution for Misleading Crypto Lending Product Promotion
Odaily Planet Daily News New York Attorney General Letitia James announced that cryptocurrency platform Uphold has been ordered to pay over $5 million in restitution to affected users for promoting CredEarn, an allegedly fraudulent crypto lending product. The investigation found that between January 2019 and October 2020, Uphold marketed CredEarn, offered by Cred LLC, as a "safe and reliable" high-yield savings product, promising users "full insurance coverage." However, it failed to disclose that the returns were actually generated from issuing high-risk microloans to low-income gamers in China, and the promised insurance coverage did not exist.
The Office of the New York Attorney General also noted that Uphold did not obtain the necessary broker or commodity broker-dealer registration while promoting this product. When Cred filed for bankruptcy in 2020, many users suffered significant losses. Under the settlement, Uphold will directly pay $5 million in restitution to affected users. Additionally, any funds Uphold recovers from Cred's bankruptcy proceedings in the future—amounting to $545,000—will also be returned to the relevant investors. (ny.gov)
