Crypto Lending Disaster: Cred Files Chapter 11 Bankruptcy

What is Cred?

Cred is a company that offered a program called CredEarn via the custodial Uphold wallet. That program was supposed to allow crypto owners to earn interest on their assets. The crypto was lent to borrowers who had to leave a collateral. The collateral was intended as a safety for the loan. All loans were supposed to be over-collateralized. In addition, Cred had an insurance.

So what could go wrong? I asked myself when I invested with them.

- A lot, apparently...

Here is what happened so far:

Two weeks ago, Uphold sent an email to all potential Cred customers stating that Uphold stopped all cooperation with Cred. CredEarn was previously heavily advertised on the Uphold website. So much so that I initially believed that CredEarn was a program by Uphold itself.

A day later a first email from Cred arrived: All funds are frozen. A couple of days afterwards another email from Cred added: Cred claimed to have become the victim of some kind of fraud. Cred claimed to be trying to determine the extent of the financial damage.

There was absolutely no information about what customers could expect. And most notably, there was no reassurance about the safety of customers' assets. Cred did also not mention their insurance. Instead, they stated that their balance sheet was affected. Looking back at it, that was basically a clue which hinted at what's coming now...

The new email

After having had to wait a long two weeks, finally we are graced by another letter from Cred. Let's read how bad it really is... Hopefully, this time, they will give us more details and hopefully, they have some good news to share... (By the way, I doubt it...)

Thank you for your outsized patience over the past two weeks.

It certainly has been a long time without any information about what's going on...

During this time, our burning desire to communicate with you conflicted with our legal obligation to remain silent until we could arrive at a clear understanding of next steps. We know this period has been concerning and stressful for you, and it has been difficult for all of us at Cred that we could not communicate more.

Sounds like finally they are allowed to communicate...

We have been working around the clock in discussion with many parties, including insurance providers, investors, restructuring specialists, and legal counsel to understand how Cred has been impacted from recent events and what it means for you. We have come to the conclusion that it is in the best interest of our customers and all stakeholders for Cred to file for Chapter 11 of the US Bankruptcy Code.

What? Are you kidding me?! We still don't even know what happened and now you tell us that it is in our best interest that you file for bankruptcy?

Why Chapter 11 Bankruptcy? We can operate this process according to three principles that you deserve:

Transparency. You will have full and continuous access to every disclosure about Cred, its history, and the recent events leading to our decision to file for Chapter 11 bankruptcy. Everyone will have the same information, and you can access all information here, by phone (1-877-739-9988), or by email ([email protected]). The self-serve portal will provide you with a frequently asked questions section, and give you a deeper understanding of the process. It will be updated with new information regularly and you can sign up to receive email alerts.

Where is that portal? I see a phone number and an email address. Do they know how the internet works? Do I have to write an email or to phone someone in order to get the web address? 😬

Apart from that, transparency is certainly most welcome as there has been and still is a lack thereof in your communication. 😬

Fairness. In a bankruptcy proceeding, every customer will have the opportunity to participate in the process. There are no special deals that would favor one customer over another, and you will have an opportunity to review all documentation.


Efficiency. Chapter 11 has a well-established set of processes, and we expect to come to a resolution within a few months.

Okay. What might this resolution look like?

As we work through a comprehensive plan to recover assets, we will be evaluating several options, including sale of the company or company assets, restructuring, and liquidation of assets. To that end, we have added Grant Lyon to Cred’s Board of Directors to oversee the restructuring process. Grant has more than 30 years of experience in corporate restructuring, and I have great confidence in his fair and objective analysis of company operations, development of strategic plans, and liquidity alternatives that serve the best interests of Cred stakeholders. Cred has also engaged Paul Hastings LLP as its legal advisor during the Chapter 11 process , and MACCO Restructuring Group as financial advisor to evaluate M&A and other restructuring opportunities.

What happened? How big is the damage that you claim occurred due to fraud? What's going on with your insurance? Will customers get back their investments?

These were the most important questions. I don't really care if you sell the company or who joins the board as long as the above questions remain unanswered...

On a personal note, my thoughts and deepest apologies to our community, those who were willing to take a risk on us - our partners, investors, employees, and customers - for the anxiety, stress, and concern we have caused you. Many Cred employees, including myself have significant amounts of money that have been entrusted with Cred. We are committed to do whatever we can to arrive at the most favorable outcome we can for all of our customers.


Dan Schatt

Co-Founder & CEO of Cred

That's it? You got to be kidding me! Finally, you are allowed to fulfill your "burning desire to communicate" with us, the customers, and that's all you're telling us?!

I'm even more disappointed than I was before that email. And I didn't think this was possible...

My take

My thoughts are with everybody who invested a large sum with Cred. I would have never thought that would happen. But it seems that they are hit really bad financially by whatever fraud might have happened. Now it seems that they will sell all assets or the entire company and split up whatever is left.

I was really lucky that this didn't happen two months later, because I was planning on putting a lot more money into Cred...

What do you think will happen next? Were you also invested with Cred?

Let me know in the comments!


I originally posted this article on here


New here? Create a free Publish0x account and earn crypto for reading. 

Are you already blogging? Here is how to earn extra Bitcoin Cash with hardly any extra work.

Get ZCash and DOGE Coin for absolutely free on PipeFlare

You like radio? Earn crypto while listening with

Are you using Brave on Android? Make sure that you receive Brave ads even when the browser is not in use. And learn how to withdraw BAT from the mobile browser.

How do you rate this article?



Technology. Fitness. Health. Stocks. Crypto.

Crypto, Stocks and Stuff
Crypto, Stocks and Stuff

In this blog I write about crypto, stocks and related topics.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.