CRED - Rise and Fall of Cryptocurrency Deposits

It was 2019 when I discovered CRED platform through Uphold. All of my BAT income through the content networks was going to uphold wallet. And uphold partnered with the CRED to provide the annual deposit program for the wallet holder.

This program was too good to be true. In your FIAT banks you would get 1 percent for the annual deposit. Meanwhile CRED was offering 10% for the bitcoin. 8% for the ETH, LTC and few other currencies like BCH. It was hard to imagine how they can afford to give the return of this level unless they are digging some sort of the gold mountain.

Imagine you getting 8% per month payout for your 100$ worth of the LTC, ETH, BCH and few other cryptocurrency. The company was operating pretty much on the legit process where even I got monthly payout for the ETH that I kept over there. Until the time came when they just could not sustain this.

What got me so much suspicious?

Around the world population is rising. And the interest rate in banks are reducing each year. No bank around the world can afford giving 7% or above at this current year. Let's speculate that even if you start the crypto bank and lend the crypto to other companies or people. You just can't afford the interest rate annual at 10%, 9% etc on crypto assets. It's just not realistic even if you are Elon musk.

What went wrong with CRED?

Last year in 2020, CRED platform decided to wind up the company. They have now the notice on their website. This notice redirects to the attorney website where it shows the delaware based company has chosen to close the doors. What went wrong? Nobody knows. People got their interest and few of them got their principal back. But they simply could not give back money to all the people. I am sure some of the people who are outside US lost their funds as they can't file lawsuit on the company that is now bankrupt and win.

What were the signs of CRED going for bankruptcy?

CRED showed many signs and it was too obvious that they were about to close sooner or later. Some of the tale-tale signs that you can see in any online investment platform are as follows.

1. Unimaginable return of interest. 10% in todays economy and population era?

2. Where is your office address on website?

3. Where are real people in your about page?

4. Where is your regulatory license PDF linking to any govt hosted website?

5. Centralized with no strong company faces out on website?

6. Daily payout? without even plan to justify this much cashflow movement?

Signs like these are pretty clear path towards the bakruptcy that you are going to see sooner or later. I have done my share of the research on such type of the companies. In past such companies had the category named HYIP. Now a days they are hiding behind the cryptocurrency flag and bearing the burden of the crypto and interest.

Is this a Rise of HYIP?

Remember the time when there was one company named liberty reserve out there. This company was heaven for the HYIP companies. Such companies used to create website and accept 10% to 100$ for investment plans of 90 days. They used to collect the money for 60 days and close the site after that. If they closed it that means they made enough money out of the gullible.

After the closure of the Liberty Reserve and Payza. They kind of struggled considering paypal could not let such companies work online. And they closed pretty easily and were in loss.

Now we are in cryptocurrency era where such fly by night type of the companies will open up every week. Collect the money for some duration and then run away with your money. No real address, no real people, no decentralized community project. Just promise of money and plenty of fish.

I am pretty much sure these companies like CRED that are offering so much higher interest on crypto and being centralized at the same time seems to be nothing but rise of the HYIP companies in the crypto niche.

What about NEXO?

I hate to say this but NEXO too seems to be checking most of my checkboxes for the company that is sooner or later going to wind up.

Here's why I think so. They have regulatory license icon at the bottom. But do you see any number, govt authorized letter for regulation? No. Oops.

Do you see any real team on About us? You do see some stock photo of CEO. But do you see any real world team?

Do you see any contact or map that shows where the office is located? Do you see where they are located and have given that information on their website?

If you have invested there. All the best. Just make sure to get the money out as you earn the interest. You never know when they choose to wind up the company and file for the bankruptcy.

CRED was just an example of how the market has plenty of sharks out there trying to take your hard earned crypto away from you. Be extremely careful where you invest and how they sell their offer to you.

Be careful. You could lose money with such companies in the dream of passive income.

Note: Your money. Your investments. Your experience. I just did my research to safeguard myself from these HYIP companies that are offering extreme level of the interest and appearing to be genuine but lacks the reputation to be genuine.