Business & Lifestyle

Crypto lender CRED files for bankruptcy

todayNovember 9, 2020 5

share close
AD
AD

WILMINGTON, Del. — A leading cryptocurrency lender is requesting bankruptcy protection as a result of some alleged shady dealings. Cryptocurrency lender CRED Inc. filed for Chapter 11 bankruptcy on Saturday before the United States Bankruptcy Court in Delaware.

According to its filing, CRED lists estimated assets between $50 million and $100 million. Their current liabilities range from $100 million to $500 million, but the actual figure is not known.

Last month, a cryptic email sent to users states some “irregularities” in the handling of “specific” corporate funds. The email would state the source of the issue as a “perpetrator of fraudulent activity”. Additionally, the company states that they are cooperating with law enforcement in relation to the matter.

This email was sent out to CRED consumers who staked their cryptocurrency through the Uphold platform. However, a further analysis reveals that nothing was ever pursued with law enforcement, which arose a red flag with Uphold executives.

A separate email from Uphold to their customers would announce the discontinuation of their relationship with CRED.

What the end of the CRED/Uphold partnership means

Fortunately, your crypto isn’t currently at risk of disappearing forever. This is in contrast to prior crypto lender organizations. The end of this partnership actually means a couple of things for those still doing business with CRED.

For instance, Uphold users can no longer move funds into CRED from their wallets. Also, as a result, you can no longer see your CRED balance on Uphold.

CRED still has an obligation to pay any redemptions due to clients into their Uphold wallet. This was according to Uphold’s email.

Should there be any issues throughout this process, Uphold may likely seek injunctive relief in court.

What to expect from the CRED bankruptcy

CRED stated in a press release that they have retained the services of Grant Lyon to the company’s board of directors. It adds that Lyon will be overseeing the restructuring process. Additionally, the company would secure the services of MACCO Restructuring Group to serve as a financial advisor. The advisor has the task of evaluating mergers and acquisitions, as well as other restructuring opportunities.

Uphold announced on Twitter Sunday that they intend to pursue legal action on behalf of its customers, citing a “breach of contract, fraud, and related claims.”

The financial services company would explain further on its website in a FAQ section specifically for this purpose.

The company alludes to some balance sheet issues on CRED’s end. This may have been an emerging and ongoing issue that would evolve into a tenuous position.

CoinDesk reports that CRED was making margin calls of $100 million or more on Bitcoin during the market crash in March.

Requests for comment from Uphold CEO JP Thieriot and CRED CEO Dan Schatt did not receive a response as of press time.

[pdf-embedder url=”https://www.heartlandnewsfeed.com/wp-content/uploads/2020/11/483441850-Cred-Bankruptcy.pdf”]


For more business, financial and cryptocurrency news, follow Jake Leonard @JakeLeonardWPMD, and Heartland Newsfeed @HLNF_Bulletin on Twitter.

Additionally, you can follow Heartland Newsfeed on Facebook and Reddit among other platforms. You can now follow our news updates on Telegram, Flote and MeWe.

877ba5a143709f07c00a798c8c1866cb?s=150&d=mp&r=g
Website |  + posts

Jake Leonard, a broadcast media and journalism veteran, is the editor-in-chief of Heartland Newsfeed. Leonard is also GM and program director of Heartland Newsfeed Radio Network, wrestling editor and contributing writer for Ambush Sports, a contributing writer for My Sports Vote and Midwest Sports Network, and a former contributor to Bleacher Report and Overtime Heroics. He resides at home in Nokomis, Ill. with his dog Buster.


Discover more from Heartland Newsfeed

Subscribe to get the latest posts sent to your email.

Written by: Jake Leonard

Rate it

Post comments (0)


hmgcil newfooter November2024

REVOLUTION RADIO PREVIOUS SONGS

Listen on Online Radio Box! Revolution RadioRevolution Radio

DEADLINES & PUBLICATION INFORMATION

Daily deadlines
News and sports submissions
: 11 p.m. Central
Advertising, legals, obituaries: 5 p.m. Central

Monday-Friday deadlines
Other business inquiries: 5 p.m. Central

Publication times
Late breaking news as it happens
Normal publication:
11 p.m. Central daily
Other news:
Published as it’s made available

LIVE TRAFFIC COUNTER

ADVERTISEMENT

AD
AD
AD
AD