NY Attorney General Secures More Than $5 Million from Uphold Over Misleading Crypto "Savings" Product

New York Attorney General Letitia James said more than $5 million in restitution has been recovered from crypto platform Uphold, citing allegations that the company misled consumers while promoting fraudulent investment schemes. The attorney general's office said that from January 2019 to October 2020, Uphold marketed CredEarn through its platform and mobile app as a safe, dependable savings product with attractive annual yields. Regulators allege the company did not adequately disclose the risks and touted protections that did not exist at the time, noting the industry offered no insurance that would shield retail investors from digital-asset losses. The settlement also addresses compliance issues, including allegations that Uphold failed to register as a broker-dealer or a commodity futures merchant. According to the announcement, Cred began suffering significant losses in March 2020 due to high-risk lending and filed for bankruptcy in November 2020, leaving thousands of Uphold users worldwide with financial losses. Under the agreement, Uphold will pay $5 million directly to affected users, an amount the state said is more than five times the fees the platform collected. Any proceeds Uphold later recovers from Cred's bankruptcy proceedings will also be passed on to impacted users. (Source: PANews; via ME News)