New York AG: Uphold to Pay Over $5M After Misleading Promotions of Crypto Product CredEarn

New York Attorney General Letitia James said crypto platform Uphold has been ordered to pay more than $5 million in restitution to users affected by its promotion of CredEarn, a crypto investment product later tied to alleged fraud. According to the investigation, from January 2019 to October 2020 Uphold marketed CredEarn—launched by Cred LLC—as a "safe and reliable" high-yield savings product and told users it came with "comprehensive insurance coverage." Regulators said the company did not disclose that the advertised returns were generated through high-risk microloans to low-income gamers in China, and that the claimed insurance coverage did not exist. The Attorney General's Office also said Uphold lacked required registrations as a broker-dealer or commodity broker-dealer while promoting the product. Cred filed for bankruptcy in 2020, and many users incurred losses. Under the settlement, Uphold will pay $5 million directly to impacted users. Any additional funds Uphold recovers through Cred's bankruptcy proceedings—reported at $545,000—will also be returned in full to the relevant investors. (ny.gov)