Crypto Lending News Update -- CredEarn: Not Hacked, But Fraud

I have previously reported on the fraud that Cred supposedly became a victim of with their CredEarn program.

CredEarn offered its customers to earn interest for lending various cryptocurrencies. The borrowers had to deposit a colleteral which was supposed to reduce the risk associated with the lending process. CredEarn was heavily advertised on the Uphold custodial wallet. Yesterday Uphold announced that they cut all ties to Cred. You can read my report about that here.

In a first email to its customers, Cred announced that they freeze all funds. They mention that their balance sheet was negatively affected and that they launched a criminal investigation.

Many readers were not happy with Cred for releasing very little information, especially with regard to the safety of the investments.

Cred has just sent another email. Let's have a look if they give us some more information:

We are writing to update you with additional information on your CredEarn Program.

I'm happy to hear that.

Cred is still in the process of assessing the business impact of a fraud incident in consultation with its Counsel and specialists.

Hmmm. That doesn't sound like we will be getting a lot of new information. 🙄

We are working hard to assess the situation and expect to share more next week.

Hmm once again. 🙄

For now, all inflows and outflows of funds will remain temporarily suspended for the November 1 program.

OK. Im pretty sure we knew that already. We'll ok, the update is that funds will be frozen for the entirety of November as well if I'm not mistaken.

We also want to acknowledge the concerns expressed about Cred being hacked. We can tell you that's not the case. No Cred systems, customer accounts, or customer information have been compromised.

OK, good. So it wasn't a hack. But what about our investments?

We know this limited information is not sufficient to understand the status of your funds,

You got that right...

we deeply regret any stress this ambiguity has put on you. Many Cred employees, family members, and partners have their funds with CredEarn as well.

Ok, so let's hope for everybody that everybody will get his or her investments back.

I know that this is supposed to reassure us that there was no harm done intentionally from Cred, but they don't state how much the employees, family members or partners invested. The minimum investment was $10, so that statement is technically true if all of the above invested $10 each...

Being the pessimist in this matter, I do actually wonder: If the funds can only be partially recovered, will employees, family members or partners receive preferential treatment? I hope not. If Cred takes responsibility for whatever it was that happened, maybe customers without any ties to Cred should receive refunds first... (I doubt that's what will happen.)

Thank you for being vocal. We want you to know your voice is being heard; and we are committed to keeping you updated on the situation.

Wow, that actually sounds like they wrote that part only in the email they sent to me. 😅 Are they reading my blog? 😅

Sincerely,

The Cred Team

Ok, so that is the end of the email.

To summarize

• Funds (or whatever might be left of them) will remain frozen.

• It wasn't a hack.

• No private information was stolen.

• The fraud is still of unknown extent.

• No reassurance that investors will get a full or partial refund.

• Cred employees, family members and partners are affected to. (To an undisclosed extent.)

What do you think? Did Cred manage to calm your nerves with this message? Or are you now more nervous than before?

Let me know in the comments!