New York Attorney General Letitia James is ordering the payment from the cryptocurrency platform
New York Attorney General (AG) Letitia James announced a significant settlement following an investigation into Uphold for its partnership with the failed lending firm Cred, LLC. The cryptocurrency platform will now have to pay $5 million to settle the investigation.
My office secured over $5 million from Uphold, a cryptocurrency platform, for misleading people and promoting a fraudulent investment scheme.
I'll always work to ensure bad actors are held accountable for putting people's livelihoods at risk.
— NY AG James (@NewYorkStateAG) April 29, 2026
Between early 2019 and late 2020, the digital asset platform marketed a product called CredEarn to its users, characterizing the service as a secure and dependable savings vehicle. However, the AG’s office found that the platform failed to disclose the high-stakes nature of the underlying business model. While customers were promised stable annual interest payments, the actual returns were generated through risky microloans issued to borrowers in China who possessed no verifiable credit history.
The settlement further addresses claims that Uphold misled the public regarding the safety of these investments. The platform allegedly informed users that the funds were backed by comprehensive insurance, even though such protections for retail digital asset losses did not exist in the industry at that time.
Additionally, the investigation revealed that Uphold had been operating within the state without the necessary registrations required for a broker or commodity broker-dealer. These regulatory lapses and deceptive marketing tactics left thousands of investors vulnerable when Cred eventually collapsed and filed for bankruptcy in late 2020.
As part of the legal resolution, Uphold is required to distribute the money directly to the affected customers who suffered financial losses. This payout represents more than five times the total fees the platform earned through its arrangement with Cred.
Furthermore, any additional funds recovered from the ongoing bankruptcy proceedings, currently estimated at $545,189, must also be passed along to the harmed investors. Impacted users are expected to receive email notifications once the recovery funds have been deposited into their accounts, marking a significant victory for consumer protection in the volatile crypto sector.
