PANews reported on May 14 that according to Cointelegraph, Daniel Schatt, former CEO of the bankrupt crypto lending platform Cred, and CFO Joseph Podulka admitted to wire fraud charges in a California federal court. According to the plea agreement, the two admitted to inducing customers to lend funds through selective disclosure of information, resulting in user losses of 65 million to 150 million US dollars. The judge plans to pronounce the verdict on August 26, and the prosecutor recommends sentences of 72 months and 62 months respectively.
After Bitcoin plunged 40% in March 2020, Cred was on the verge of bankruptcy due to its inability to meet margin requirements, but executives still concealed the risks from new customers. Investigations showed that the platform actually relied on MoKredit's unsecured micro-loan business, which was inconsistent with its claimed "fully collateralized lending" model. When Cred went bankrupt in November 2020, customers lost more than $150 million, but the current valuation of some assets has risen to $783 million.
