The former executive of crypto lending firm Cred has pleaded guilty to wire fraud charges

According to Cointelegraph, Daniel Schatt and CFO Joseph Podulka, former CEOs of bankrupt crypto lending platform Cred, pleaded guilty to wire fraud charges in federal court in California. According to the plea agreement, the two admitted to inducing customers to lend money through selective disclosures, resulting in losses of 65 million to $150 million to users. The judge is scheduled to deliver the sentence on August 26, and prosecutors recommend prison terms 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 hid the risk from new customers. Investigations revealed that the platform actually relied on MoKredit's unsecured microlending business, which was not in line with its claimed "fully collateralized lending" model. When Cred went bankrupt in November 2020, customers lost more than $150 million, but some assets are now valued at $783 million.