New York Attorney General Letitia James has secured a major settlement from cryptocurrency platform Uphold after its involvement in promoting CredEarn, a lending product tied to Cred, LLC, and CEO Daniel Schatt, on May 3, 2026.
The company marketed the product in New York between January 2019 and October 2020 through its platform and mobile app. It described CredEarn as a safe savings option in New York with strong interest returns. Regulators in New York later found that Uphold failed to disclose key risks behind the returns.
The promotion attracted global users seeking passive income in crypto markets. The settlement now directs funds back to affected customers and closes a major enforcement case in the state. Officials emphasized investor protection standards globally now.
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New York: Misleading returns and hidden lending risks
Investigators said Uphold misrepresented CredEarn as a low-risk product backed by comprehensive insurance protections. The Attorney General’s office found no such insurance existed in the digital asset industry during the period.
The firm also failed to register as a broker or commodity broker-dealer while offering the service. Cred generated returns through microloans to low-income video game players in China who lacked traditional credit access. The lending model carried high default risk and limited transparency for investors.
In March 2020, there was red ink in terms of bleeding on the side of the business as far as their borrowing exposure is concerned. After eight months, the business found itself filing for bankruptcy, meaning that numerous individuals around the globe lost money as a result.
Wider regulatory pressure in crypto markets
In accordance with the settlement, Uphold is required to pay more than five million dollars directly to those investors who were affected by the CredEarn program, which will be more than their previous earnings.
Furthermore, the rest of the money might come up in the course of Cred’s bankruptcy proceeding, which sees Uphold claiming almost 545 thousand dollars. The recovered money will be distributed among the users as and when available. The customers will receive a notification via email upon processing the payment.
The New York authorities emphasized that this case reflects responsibility in digital asset marketplaces and advised investors to rely on those platforms that provide them with financial services. Meanwhile, conflicts arise within the regulatory environment in the US crypto industry.
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