14-5-2025 – At San Francisco’s federal courthouse, the founding chief executive and financial director of the collapsed digital asset lender Cred Inc. have admitted to orchestrating a conspiracy to deceive their clientele.
The pair’s confession, delivered before Judge William Alsup, unveiled a calculated scheme of selective disclosure that painted an artificially rosy picture of the firm’s fiscal standing. Their duplicitous strategy ultimately led to catastrophic losses for thousands of investors.
The enterprise’s demise was set in motion during the coronavirus pandemic’s early days, when a spectacular Bitcoin market collapse triggered a devastating chain of events. The cryptocurrency’s value plummeted by two-fifths, causing unprecedented market turbulence.
Rather than confronting this crisis transparently, the leadership chose to perpetuate their deception, actively courting fresh deposits whilst discouraging withdrawals. The situation was further complicated by their precarious relationship with MoKredit, a Chinese gaming loan provider established by another Cred co-founder.
In a remarkably imprudent move, Cred had channelled approximately 80% of their clients’ assets into this single borrower, which specialised in unsecured lending to Chinese gaming enthusiasts. When MoKredit defaulted on $40 million in loans, Cred’s house of cards began to collapse.
Adding to the firm’s woes, their Chief Capital Officer allegedly absconded with Bitcoin valued at $2 million, whilst a separate fraudulent scheme cost them 800 Bitcoin, worth $9 million at the time.
The aftermath saw more than 6,000 customers filing claims exceeding $140 million when Cred entered bankruptcy proceedings in October 2020. The prosecution has recommended substantial prison terms for both executives, with sentencing scheduled for late August.