Uphold HQ, Inc (“Uphold”) yesterday entered into a settlement agreement with the New York Office of the Attorney General (“OAG”), to resolve OAG’s civil investigation into the collapse of Cred, LLC (“Cred”), a third-party company, and Cred’s CredEarn program, due to fraud perpetrated by Cred’s executives in 2020.
Yesterday, the MPC released a statement about this regulation, which misrepresents key facts.
Uphold categorically rejects any suggestion that she knowingly encouraged Cred’s fraudulent scheme. Rather, Cred deliberately and repeatedly misled Uphold. Uphold, like its customers and other CredEarn users, was a victim of Cred’s deception. The U.S. Department of Justice identified Uphold as a victim in its criminal prosecution of Cred executives.
Statements contained in the OAG press release should not be construed as suggesting that Uphold knowingly or otherwise acted to intentionally deceive customers. Uphold expressly rejects these characterizations and has not accepted them or admitted any liability in connection with its settlement with the MPC.
“We are deeply disappointed by the New York Attorney General’s statement, which is deeply inaccurate and misrepresents the facts of the case,” said Simon McLoughlin, CEO of Uphold.
“Uphold acted with integrity throughout its relationship with Cred LLC, a third-party lending company that experienced financial difficulties in 2020. As soon as Uphold became aware of the problems at Cred, we demanded that Cred notify its regulators, shut down access to the service, and act to protect our customers immediately.
“The U.S. Department of Justice, in its criminal investigation of Cred, correctly concluded that Uphold was a victim of Cred and was in no way responsible for that company’s actions.”
Uphold and the OAG have jointly agreed on the factual basis on which any public statement would be issued. What was published yesterday by the MPC distorts these facts and is not in accordance with the parties’ agreement.
As the OAG acknowledged in the settlement agreement, Uphold was not aware of liquidity issues at Cred until October 2020. Uphold was also unaware that Cred’s statements about the financial viability of its CredEarn product were false and that Cred was taking active steps to deceive Uphold and CredEarn users.
Importantly, as soon as Uphold became aware of Cred’s liquidity problems, it acted decisively to protect its customers. Within hours, Uphold froze Cred’s access to Uphold, effectively cutting Cred off from access to Uphold.
continuing to offer its product on the Uphold platform. Uphold immediately demanded that Cred itself report losses of customer funds to its regulators, issuing an ultimatum that Uphold would notify regulators itself if Cred did not do so. These actions highlighted Cred’s misconduct and disrupted its ability to continue accepting customer funds.
Without Uphold’s intervention, Cred would have continued to solicit and receive funds while concealing its losses. Uphold stopped this conduct and subsequently cooperated extensively with federal law enforcement’s prosecution of Dan Schatt and other Cred executives, resulting in significant prison sentences and financial restitution orders for the victims.
These facts fundamentally contradict any narrative suggesting passive or complicit behavior on the part of Uphold.
Uphold voluntarily cooperated with regulators throughout the investigation and entered into a good faith cease and desist agreement with OAG to resolve regulatory issues relating primarily to marketing and registration matters, without any admission of liability. This agreement does not contain any allegation that Uphold had knowledge of a fraudulent scheme or that it caused losses to investors.
Uphold remains focused on transparency, regulatory compliance and user protection.
About Respect
Uphold is a fintech company that believes on-chain services are the future of finance. It provides modern infrastructure for on-chain payments, banking, and investments. Offering consumer services, business services and institutional trading, Uphold makes financial services simple and reliable for millions of customers in more than 140 countries.
Uphold integrates with over 30 trading platforms, including centralized and decentralized exchanges, to provide superior liquidity, resilience and optimal execution. Uphold never lends its clients’ assets and is always 100% reserved.
The company has pioneered radical transparency and uniquely publishes its assets and liabilities every 30 seconds on a public website (
Uphold is regulated in the United States by FinCen and state regulators; and is registered in the UK with the FCA and in Europe with the Financial Crime Investigation Department of the Ministry of the Interior of the Republic of Lithuania. Securities products and services are offered by Uphold Securities, Inc., an SEC registered broker-dealer and member FINRA and SIPC.
To learn more about Uphold’s products and services, visit uphold.com.
