In a significant development, Uphold, a cryptocurrency platform, is set to reimburse more than $5 million to customers it misled through its promotional practices. This settlement represents a sum that exceeds five times the profits Uphold generated from its associated services.
Details of the Settlement
New York Attorney General Letitia James announced the settlement earlier this week, putting an end to an investigation into Uphold’s involvement with CredEarn, a crypto savings product operated by Cred, LLC, led by CEO Daniel Schatt.
From January 2019 to October 2020, Uphold marketed CredEarn to its user base via its platform and mobile application, promoting it as a secure investment option with promising annual returns. However, crucial information regarding the nature of these returns was not disclosed to users.
The returns were derived from microloans offered to low-income gamers in China. These borrowers typically had no prior credit history and lacked access to mainstream banking services, a fact that was omitted from Uphold’s advertising and communications.
My office secured over $5 million from Uphold, a cryptocurrency platform, for misleading people and promoting a fraudulent investment scheme.
I will tirelessly work to ensure that those who endanger people’s financial well-being are held accountable.
— NY AG James (@NewYorkStateAG) April 29, 2026
False Claims About Insurance
The misleading promotions extended beyond the misleading description of the CredEarn product. The Attorney General’s office indicated that Uphold falsely assured customers that Cred had comprehensive insurance for its investments, a claim that was unfounded. At the time, no protective insurance for retail investors against cryptocurrency losses existed in the industry.
Furthermore, Uphold was not in compliance with necessary regulations, as it lacked required registrations as a broker or commodity broker-dealer. These oversights contributed to significant financial repercussions for both the company and its users.
By March 2020, Cred began experiencing financial difficulties stemming from its lending model. Eight months later, the company declared bankruptcy, leaving a significant number of Uphold customers empty-handed regarding their investments.
As part of the settlement, affected users will receive compensation from the established $5 million fund. Additionally, Uphold is expected to receive $545,189 from the ongoing bankruptcy proceedings of Cred; any funds recovered will further benefit investors who were adversely affected. Customers will be informed via email when funds are made available in their accounts.
“Investors should have confidence in the advice and information they receive from the industry,” Attorney General James remarked, emphasizing her commitment to holding entities responsible for jeopardizing the financial stability of consumers.
Image credit: Finder, chart from TradingView
