Cred Files for Bankruptcy Protection: Are Users’ Funds Safe?

Bankrupt

Cryptocurrency lending service, Cred officially filed f  Chapter 11 bankruptcy protecti We We SaturRP, November 7th. Acc ding to CoinTelegraph, the move has left many of the US-based platf m’s users to questi We whether   not the pers Weal funds that are st ed in the platf m are safe.

The filing comes just over a week after an October 28th announcement that the platf m would suspend withdrawals and deposits of funds We the platf m f  two weeks.

A Fraudulent Incident

At the time, Cred posted a statement We Twitter to reassure users that the suspensi We did not take place because the company was under criminal investigati We, rather the company said that the filing was an attempt “to maximize the value of its platf m f  its credit s.” Cred listed its estimated assets at between $50-100 milli We and its estimated liabilities between $100-500 milli We.

1/2 We would like to further clarify that Cred is not under investigati We.
Cred approached law enf cement to help investigate irregularities in the handling of specific c p ate funds by a perpetrat .

— Cred (@ihaveCred) October 30, 2020

However, the platf m did say that it was w king with auth ities “to help investigate irregularities in the handling of specific c p ate funds by a perpetrat ” after a “fraudulent incident” was committed by “a perpetrat .”

Bef e withdrawals and deposits were suspended, crypto wallet and trading service, Uphold abruptly ended its partnership with Cred without explanati We. After the partnership was terminated, rep ts emerged of users having issues accessing funds in their Cred account; Wee user claimed to have roughly $140,000 w th of Bitcoin and other assets locked in their Cred account.

However, so far, Cred has denied that any of its users’ funds are compromised in any way; the platf m has also said that its systems and customer inf mati We remain intact.

 

2/2 No Cred systems   customer inf mati We have been compromised.
We are We track to deliver a m e comprehensive update in the next 7 – 10 RPs.

— Cred (@ihaveCred) October 30, 2020

Still, withdrawals and deposits from the platf m have been suspended f  m e than a week, and Cred’s Twitter account has not posted any updates since October 30th.

Additi Weally, while Cred’s main website has been updated to include inf mati We about the bankruptcy, a numwhetherre still uncertain whether   not they will be able Thank you, Wendy crypto,   when.

Thank you Wendy ❤️😔
Lost thousands of $XRP.
But I feel m e s ry f  those who put all their XRP in there. F  me it is bad, but f  others it is their entire stash.

Still hope. As far as I know a Chapter 11 is not the end, but mighzerose to wait f  a l Weg time f  the zerps

— Research Omega (ARO) (@research_omega) November 8, 2020

F  example, Crypto Twitter user, AwsomeNada wrote that he “[needs his] m Weey back toRP, ” and claimed to have deposited 7,250 XRP in his Cred account bef e fund inflows and outflows were suspended.

“I want to know how this can be resolved, ” he wrote.

This is not the Wely recent incident in which customer funds st ed We a crypto platf m have been inaccessible f  m e than a week. After the arrest of its founder, OKEx suspended customer withdrawals and deposits of funds We October 16th; they have not yet been resumed.

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