The blockchain banking system, CRED, revealed last week that a “fraudulent incident” had given them no choice but to cease all CredEarn deposits and withdrawals. They already had filed for bankruptcy last Sunday night, leaving users to lose their funds.
A legally-worded press release was posted late Sunday following the filing, with no notification made on the company’s social media accounts. The filing means that the company has declared it is out of cash, with creditors planning to fight over what little is left and then partners like Uphold preparing lawsuits.
User Funds Likely Gone
Cred’s dilemmas started on October 29 when they sent an email to users warning of the unspecified fraudulent activity that had prompted them to halt withdrawals and deposits, stating that an update would be forthcoming within two weeks. This update has now arrived in a bankruptcy filing, with little further information coming out of the company. This situation is even less likely to change now that the administrators are in charge.
The unfortunate fact is that clients who held money on the CredEarn platform may have lost everything, with a dispute between creditors over whatever funds are left now inevitable. One of those will be the crypto/fiat bridge Uphold, which has been working with Cred for over two years but declared that it is taking legal action against them:
Uphold was more open than Cred about the circumstances last week, saying in a series of tweets they were “not sufficiently reassured” by Cred as far back as October 23 when rumblings of a potential issue first surfaced. The firm now plans to sue the company “for breach of contract, fraud, and related claims” on behalf of its clients.
It’s The Waiting Game For Cred Clients
There is little they can do now for those with funds tied up on the CredEarn platform. An FAQ section has been set up on Intercom, but the object’s fact is that the company has admitted that it is broke and has taken its first steps towards dismissal in filing for bankruptcy.
Officials will now compile a list of creditors and divide up what little money is left, if any, between them, with users left in the dark about where their money is and what happened.
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