Crypto Lending Service Cred filed for bankruptcy on Saturday after the platform lost its funds
The Delaware crypto credit and lending company had to file for Chapter 11 bankruptcy protection following an insider fraud case. Cred has now ceased its services, including its inflows and outflows.
Posted on Twitter by Cred: “We deeply regret that we raised so much concern as we were assessing the business impact of a recent fraudulent incident. Cred is working with law enforcement to investigate the incident. However, no personal customer information or account information was compromised. “
Cred is believed to owe more than $ 67 million based on the bankruptcy documents. However, that’s not the only problem the company is facing: cryptocurrency wallet service Uphold also ended its partnership with Cred, removing Dan Schatt (CEO at Cred) from its board of directors.
On a blog, Uphold stated, “Uphold ended their relationship and stopped making deposits with Cred so quickly to protect their customers and because we were and remain angry that we were not told about the current situation.”
Regarding the insider fraud incident over two weeks ago, Uphold stated, “Cred appears to have been extraordinarily unlucky enough to employ a suspected fraudster who is accused of stealing money and making bad investments.”
While the details of the fraud incident and the extent of the damage are currently unclear, one thing is clear: the San Francisco-based company is going downhill. Grant Lyon has since been tasked with running and overseeing the company to keep afloat.
In the meantime, Cred customers have been using social media platforms to request responses, especially for the security of their funds. Cred estimated his net worth at $ 50 to 100 million and his liabilities at $ 100 to 500 million.
Deposits and withdrawals are likely to remain inaccessible as the crypto credit and lending service goes bankrupt.