Former Executive of Crypto Lending Firm Cred Admits to Wire Fraud Charges

According to Cointelegraph, former CEO Daniel Schatt and CFO Joseph Podulka of the bankrupt crypto lending platform Cred have admitted to charges of wire fraud in a federal court in California. As per the plea agreement, both acknowledged inducing customers to lend funds through selective information disclosure, resulting in user losses ranging from $65 million to $150 million. The judge is set to sentence on August 26, with the prosecution recommending prison terms of 72 months and 62 months, respectively. After Bitcoin plummeted 40% in March 2020, Cred was on the brink of bankruptcy due to its inability to meet margin requirements, yet executives continued to conceal risks from new customers. Investigations revealed that the platform actually relied on MoKredit's unsecured microloan business, contrary to its claimed "fully collateralized lending" model. When Cred went bankrupt in November 2020, customer losses exceeded $150 million, but some assets are now valued at $783 million.