Cred Files For Chapter 11 Bankruptcy Protection, Leaves Many Customers Searching For Solutions To Get Their Funds
Cred Files For Chapter 11 Bankruptcy Protection, Leaves Many Customers Searching For Solutions To Get Their Funds
November 10, 2020
Cred Files For Chapter 11 Bankruptcy Protection, Leaves Many Customers Searching For Solutions To Get Their Funds
Cred Files For Chapter 11 Bankruptcy Protection, Leaves Many Customers Searching For Solutions To Get Their Funds
November 10, 2020

Cred, the US-based cryptocurrency lending service, has filed for Chapter 11 bankruptcy protection on November 7 (Saturday), leaving many customers searching for solutions to get their funds

It has been reported according to court documents that the legal team for Cred CEO Daniel Schatt filed bankruptcy papers for the company in the District of Delaware on Saturday.

However, Cred listed its estimated assets at between $50-100 million and its estimated liabilities between $100-500 million.

 

The company said that it had filed for Chapter 11 in an attempt “to maximize the value of its platform for its creditors.”

Likewise, the bankruptcy filing comes after an announcement on October 28 that the platform would be suspending fund inflows and outflows for two weeks.

Cred stated on Twitter that the suspension was not due to any criminal investigation but the platform was working with authorities “to help investigate irregularities in the handling of specific corporate funds by a perpetrator,” citing a “fraudulent incident” as the cause.

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Shortly before the announcement, Uphold, the cryptocurrency wallet and trading platform, terminated its partnership with Cred.

As per the report, at least one Uphold user had been having technical problems with the platform’s CredEarn program allegedly caused by Cred. After the dissolution of the Uphold partnership, the user claimed that he had around $140,000 in Bitcoin (BTC) and other assets locked in his Cred account.

Likewise, Cred has said none of its systems, customer accounts, or customer information was compromised in the “fraudulent incident” but has not issued an update on Twitter or by e-mail to its users since October 30 regarding assets accessed using the platform.

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One Twitter user said:

“We just want to know that our funds are safe. Please address this on your next update, not an announcement to the next announcement.”

Moreover, the platform has updated its website to include information on the Chapter 11 filing, but many users did not get the message.

Crypto Twitter user AwsomeNada claimed to have 7,250 XRP, around $1,829 at the time of publication, deposited on their last transaction before fund inflows and outflows were suspended.

AwsomeNada said:

“I want to know how this can be resolved. I need my money back today.”

Users made similar claims of losing access to “thousands of XRP” and other assets without hearing if their funds were safe during the bankruptcy process. 

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While both fund inflows and outflows will seemingly remain inaccessible as Cred goes through the Chapter 11 process, other exchanges have also been giving users reason to see the meaning behind “not your keys, not your coins.”

Thus, digital asset withdrawals have remained closed on crypto exchange OKEx since October 16 amidst rumors the police have detained its founder.

Source: Cointelegraph


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Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs with an experience of 1 year. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. Her interest lies in blockchain technology and cryptocurrency space, as she loves writing about blockchain and other blockchain-related articles. Currently, she is working on blockchain-based news, reviews, featured articles, and guides.