Former executives of the collapsed crypto lending firm, Cred, have pleaded guilty to wire fraud as part of a plea agreement. Daniel Schatt, the former CEO, and Joseph Podulka, the ex-CFO, admitted in California District Court to misleading customers about the company's financial health. U.S. District Judge William Alsup accepted their pleas, with sentencing set for August 26. The defendants acknowledged that their actions led to user losses estimated between $65 million and $150 million when Cred went bankrupt in November 2020, affecting customers who reported losses totaling up to $150 million. Allegations against the executives include misrepresenting the nature of Cred’s loan book, which heavily relied on risky unsecured loans from a Chinese firm, and falsely claiming that all investments were hedged. Other charges of wire fraud and money laundering were also leveled against former chief commercial officer James Alexander. The case highlights ongoing legal scrutiny facing crypto executives following significant collapses in the sector.

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