New York State forces Uphold to pay a $5 million fine for fraudulent cryptocurrency investment scheme

New York Attorney General Letitia James announced that the state has recovered over $5 million from the cryptocurrency platform Uphold due to its role in promoting a fraudulent investment product.

The settlement primarily revolves around Uphold's promotional activities for the product CredEarn launched by Cred LLC and its CEO Daniel Schatt. Between January 2019 and October 2020, Uphold advertised CredEarn on its platform and mobile app as a safe, reliable savings product that offered attractive annual returns. However, the Attorney General's office pointed out in a statement that Uphold did not inform users that Cred actually obtained these returns by issuing small loans to low-income video game players, who typically have no credit history and cannot access services from traditional financial institutions.