NEW YORK – New York Attorney General Letitia James today secured more than $5 million from the cryptocurrency platform Uphold HQ, Inc. (Uphold) for misleading investors and promoting a fraudulent cryptocurrency investment scheme orchestrated by Cred, LLC (Cred) and it’s Chief Executive Officer, Daniel Schatt. An investigation by the Office of the Attorney General (OAG) found that Uphold misleadingly promoted and offered Cred’s investment product, CredEarn, to its customers, in violation of New York law. Uphold advertised CredEarn as a reliable savings product, when in reality, Cred was making risky loans to borrowers in China with no credit histories. When Cred collapsed in 2020, thousands of Uphold’s customers across the world who had invested in CredEarn lost millions of dollars. As a result of today’s settlement, Uphold will pay $5 million to harmed investors – more than five times the amount it earned in fees it collected – and change its policies to better protect users from third-party investment schemes.
“When crypto companies break the law and mislead investors, the consequences can be devastating to New Yorkers’ livelihoods,” said Attorney General James. “Uphold promoted risky investments and misled its customers to believe they were safe. Investors should be able to trust the industry advice they receive, and my office will always work to ensure bad actors are held accountable for endangering their customers’ financial security.”
Uphold is a cryptocurrency platform that offers users the ability to buy, sell, and trade digital assets. From January 2019 through October 2020, Uphold offered CredEarn on its platform and mobile app. CredEarn promised significant annual interest payments to customers who invested their cryptocurrency in the company. In advertising CredEarn, Uphold misleadingly promoted it as a safe, reliable savings product. In reality, Cred generated interest through risky micro-loans to video game players in China who had low monthly incomes, no credit histories, and no access to credit through traditional Chinese financial institutions. In promoting CredEarn, Uphold also stated that Cred was covered by “comprehensive insurance,” but no insurance that would protect retail investors from investment losses of digital assets existed in the industry. The OAG’s investigation also found that Uphold was illegally promoting CredEarn without registering as either a broker or commodity broker-dealer.
Starting in March 2020, Cred incurred significant losses due to its risky lending practices and mismanagement, and declared bankruptcy in November 2020, resulting in investor losses of millions of dollars.
As a result of OAG’s investigation, Uphold will pay $5 million to customers who suffered losses. All payments Uphold receives from Cred’s bankruptcy proceedings, in which it is owed $545,189, will also be paid to customers who were harmed. Investors will receive an email from Uphold informing them that funds will be distributed to their accounts. Additionally, Uphold must maintain and improve its due diligence policies before partnering with or recommending a third-party investment product. As part of the settlement, Uphold will also register as a broker with the OAG.
Attorney General James has been a national leader in protecting New York investors and holding cryptocurrency companies accountable. In July 2025, Attorney General James took action to stop a crypto scam targeting Russian-speaking New Yorkers. In January 2025, Attorney General James became the first regulator to provide notice of litigation by depositing a nonfungible token (NFT) into the wallets scammers used to steal the victims’ cryptocurrency. In June 2024, Attorney General James sued cryptocurrency trading company NovaTechFx for engaging in an illegal pyramid scheme that defrauded hundreds of thousands of investors worldwide, including over 11,000 New Yorkers, of over a billion dollars’ worth of cryptocurrency.
This matter was handled by Senior Enforcement Counsel Tanya Trakht and Fennie Wang, with assistance from Assistant Attorney General Stephen Ross, Principal Accountant Shalendra Ramadhin, and Legal Assistants Natalya Fadeyeva and Elijah Maksimov of the Investor Protection Bureau. The Investor Protection Bureau is led by Bureau Chief Shamiso Maswoswe and Deputy Bureau Chief Kenneth Haim. The Investor Protection Bureau is part of the Division of Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.
