In my last article I reported that Uphold stopped working together with Cred. Through the CredEarn program it was possible to gain interest on many different cryptos that users held at the Uphold custodial wallet. Cred is a separate company, but Uphold made it very easy for users to take advantage of the CredEarn program.
As Uphold is used for converting and for cashing out BAT from the rewards program of the awesome Brave browser, many people had an account with Uphold. And many probably wanted to earn interest on their crypto. I put almost all my crypto into that program.
It seems like that was a huge mistake... Because I have just received this bombshell of an email from Cred:
Cred has experienced irregularities in the handling of specific corporate funds by a perpetrator of fraudulent activity
Oh no... 🙈 How bad is it?
that has negatively impacted Cred’s balance sheet
OK, that sounds really bad...
and precipitated a law enforcement investigation into the loss of these funds. Cred is cooperating fully with law enforcement authorities in connection with the investigation into the incident.
OK, good. Hopefully, some of these funds can be recovered.
Cred is in the process of carrying out an internal accounting of its assets and assessing the impact of the incident on its current business and in consultation with legal counsel has determined to temporarily suspend all inflows and outflows of funds relating to the CredEarn program.
Oh no... That doesn't sound good... 🙈
No client personal information or other account data has been compromised.
OK, that sounds like they were not hacked at least.
Given the circumstances, we are unable to comment further at this time but we will undertake to provide an update within the next 2 weeks. We regret having to relay this disheartening news. However, we assure you that we will share as much information as we can, to keep you abreast of this matter. Thank you for your patience.
Oh no. I wish they said something like "but don't worry, you will get your initial investment back. Note that they said nothing like that...
The Cred Team
That is the end of the email. Then the fine print begins. They state that they lend user's crypto to other users who pledge a collateral. What could possibly go wrong? The lenders pledge a collateral. It seems that someone found a way to exploit that system in some way on a massive scale.
I compared the rest of the fine print to previous emails from Cred and it seems that they didn't change it after the above mentioned incident. That's why I don't copy it here.
I will keep you updated on what happens in this case. How much of your crypto did you put into CredEarn? None? Or a lot - like me? Let me know in the comments!
What can we learn from this?
I guess never to put all of our eggs into one basket... I actually wanted to recommend to my parents that they should buy some stablecoins with their fiat money in order to earn some interest of about 4% annually with CredEarn. I'm really glad that I haven't had the time to do that...