Cred Inc - Files for Chapter 11 Bankruptcy

Cred Inc - Files for Chapter 11 Bankruptcy

By Mozzie | Crypto Aficionado | 10 Nov 2020

Cred sent out a flurry of tweets late last month that left its customers in shock and confusion, funds frozen, platform down, whats next?

What does this mean for competing services like BlockFi, Celsius and Nexo?

Update #1 Oct 28th, 2020 - The Cred platform goes down, funds incoming and outgoing frozen, law enforcement authorities are investigating a fraudulent incident at the company, personal info and account data are safe with no further comment but promises of an update within 2 weeks.

Update #2 Oct 29th, 2020 - Cred indicates they are still processing the business impact of the fraud incident that occured. They reiterated that it was not a hack as everyone began speculating on the cause, Cred came out to debunk that theory and confirm that Cred systems and customer info had not been compromised.

Uodate #3 Oct 30th, 2020 -  Cred provides last update on the ongoing situation, they've reached out to law enforcement to help investigate "irregularities of corporate funds" by an unnamed or unknown perpetrator has occurred. Reiterated once again that Cred systems and customer info is safe and has not been compromised.

Update #4 Nov 8th, 2020

CRED INC. announced today that it, along with all of its subsidiaries, has commenced a voluntary Chapter 11 case in the United States Bankruptcy Court for the District of Delaware to explore strategic alternatives, including, without limitation, the restructuring of its balance sheet or the sale of its business as a going concern, in a court-supervised process. The Cred technology platform has serviced customers in over 100 countries and Cred intends to use the Chapter 11 process in its attempt to maximize the value of its platform for its creditors.

I'm sure a chapter 11 filing for bankruptcy is the last thing Cred customers wanted to hear after waiting patiently to see what's happening with their funds. 

Cred Inc. says it was defrauded by its former chief capital officer, who tried to take control of a unit of the company and later ran off with around $3 million in Bitcoin that was meant to help the company rectify its hedging strategy. Cred Inc. owes its users around $140 million, according to court filings.

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