Crypto platform Cred management admits to financial fraud

Former CEO of the crypto lending platform Cred, Daniel Shutt, and CFO Joseph Podulka have pleaded guilty to committing financial fraud. This became known from documents from the California District Court, which also mentions the participation of former commercial director James Alexander in the scheme.

The indictment alleges that the company's executives systematically deceived customers by presenting them with positive information about risks and returns while hiding key business problems. This approach allowed them to stimulate demand for cryptocurrency obligations without disclosing the real threats to investors.

The prosecutor's office paid special attention to Cred's secret dependence on the Chinese company MoKredit, which issued unsecured microloans to Chinese gamers. At the same time, Cred publicly stated that it specializes exclusively in secured lending. In reality, a significant part of the portfolio was associated with high-risk operations that did not comply with the declared principles of security.

When Bitcoin's value fell 40% five years ago, the platform failed to meet margin calls, leading to Cred's bankruptcy in November of that year. Affected customers lost about $150 million in funds. The judge is set to sentence the men on August 26, 2025, and they face 13 counts of financial fraud and money laundering through digital assets.

Earlier it was reported that on May 8, a New York court sentenced former CEO of the Celsius platform Alex Mashinsky to 12 years in prison. In addition to the prison term, he is required to pay a $48 million fine and give up some of his real estate.