Uphold will be pushing forcefully for satisfactory responses and redress from Cred on behalf of its customers. Our main focus now is on helping Uphold users with loans at Cred to get proper answers from the company.
The situation touches our core principles. Uphold was set up specifically to eliminate credit risk: that's why we don't loan against our balance sheet. You can check our assets and liabilities in real time and you’ll find that we're always 100% (or more) reserved, so you always know your money's safe on our platform.
We decided to add links to third-party platforms to meet customer demand for yield-earning on digital assets. We chose Cred as our first provider because they were set up by a highly experienced team of Paypal veterans - Dan Schatt literally wrote the book, Virtual Banking.
Cred appears to have had the extraordinary bad luck of employing an alleged fraudster, who is accused of stealing money and making bad investments. We do not know the extent of any damage this may have caused. This is obviously very upsetting for Cred’s customers as well as the many good and talented people who work at the firm. As far as we know, the matter relates to one former employee.
Uphold terminated its relationship and shut off deposits to Cred so quickly in order to protect its customers and because we were, and remain, annoyed that we were not told more about the current situation earlier.
The first we knew about it was on Friday, October 23rd when we were contacted by a journalist about a potential loss at Cred. The initial answers we received from Cred were not good enough for us. So, we brought in two experienced bank workout pros to run some very preliminary enquiries the same day, and saw enough to merit our cutting ties and insisting that Cred disclose. We removed Dan Schatt as a designee Board Member at Uphold.
Like you, we feel let down and we will continue to press for resolution.