CRED Customers Demand More Answers After Bankruptcy Announcement

CRED customers demand more answers after the platform announced bankruptcy earlier today as they fear their funds are not safe. In our latest cryptocurrency news, we are reading more on the update.

The United-States-based crypto-asset lending service CRED filed for Chapter 11 bankruptcy protection which left many customers searching for solutions to get their funds. According to the court documents, the legal team for the CEO Daniel Schatt of CRED filed bankruptcy papers for the company in the District of Delaware on November 7. The platform listed its estimated assets between $50 and $100 million with estimated liabilities between $100 and $500 million. In an official statement, the company said it filed for Chapter 11 while trying to maximize the value of the platform for its creditors.

2/2 No Cred systems or customer information have been compromised.
We are on track to deliver a more comprehensive update in the next 7 – 10 days.

— Cred (@ihaveCred) October 30, 2020

The bankruptcy filing came after the announcement in October when the platform said it will be suspending fund inflows and outflows for two weeks. CRED stated on Twitter that the suspension was not due to any criminal investigation but that the platform was working with authorities to help investigate irregularities in the handling of specific corporate funds by the malicious actor, citing a fraudulent incident as the cause.

Right before the announcement, the crypto wallet and trading platform Uphold terminated the partnership with Cred and according to the reports, at least one Uphold user was having technical problems with the platform’s CredEarn program allegedly caused by the platform. After the dissolution of the partnership, the user claimed that he had about $140,000 in BTC and other assets locked in his accounts. Cred said none of its systems or customer accounts were compromised in the fraudulent incident but has not issued an update on Twitter or purportedly by email to its users since October 30 about the assets accessed on the platform. 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.”

The platform has now updated its website to include more info on Chapter 11 filing by a lot of the users did not get the message. The Twitter account AwesomeNADA claimed to have about 7250 XRP or $1829 at the time of publication which was deposited in their last transaction before the fund inflows and outflows got suspended:

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

The users made similar claims of losing access to “thousands of XRP” and other assets without hearing if the funds were actually safe in the entire bankruptcy process.