Three ex-executives of the bankrupt cryptocurrency lender CRED face charges for allegedly committing wire fraud and money laundering.
Cred was a popular cryptocurrency lending platform, which was providing borrowing and lending services within the digital asset space. However, it faced financial difficulties and ultimately filed for bankruptcy on 7 Nov 2020.
On 3 May 2024, The United States Attorney’s Office for the Northern District of California released an official statement on the charges against three former Cred executives.
Daniel Schatt, the former CEO, and Joseph Podulka, the former chief financial officer, are facing 13 charges related to wire fraud and money laundering. Additionally, James Alexander, the former chief commercial officer, is charged with four counts.
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Investigation showed that these charged people were involved in a deceptive scheme defrauding potential victims of hundreds of millions of dollars of cryptocurrency at market value.
Alongside these allegations, Cred’s former executives also misled customers about Cred’s lending and investment practices.
Schatt and Podulka went to court for the first time on May 2. They have to go back on May 8 to give their plea. Alexander’s first court date hasn’t been decided yet.
Notably the majority of the crypto lending companies, as well as crypto exchanges, collapsed badly in 2022. In 2023, another crypto-lending platform Genesis filed for bankruptcy. Its leaders handled the situation with other partners by liquidating $2.1 billion worth of Grayscale Bitcoin Trust shares.
The bankruptcy of multiple crypto companies in 2022 was interconnected with the collapsed FTX exchange & Terra crypto token downfall.
All these types of incidents are a lesson for the new age crypto investors, to maintain crypto funds at safe & registered crypto platforms, instead of any type of platform which offers high yield.
Read also: Cyber Capital founder warns over Sui token’s 84% supply control
Bankrupt crypto lender CRED’s former executives face money laundering charges
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