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On Saturday, US-based cryptocurrency lending service Cred filed for Chapter 11 bankruptcy protection, leaving many customers looking for ways to get their funds.
According to court documents, Cred’s CEO Daniel Schatt’s legal team filed for bankruptcy for the company in the District of Delaware on November 7.
Cred listed its estimated assets between $ 50-100 million and its estimated liabilities between $ 100-500 million.
In an official statement, the company said it has filed for Chapter 11 in an effort to “maximize the value of its platform for its creditors.”
The bankruptcy filing comes following an October 28 announcement that the platform will suspend inflows and outflows of funds for two weeks. Cred declared on Twitter that the suspension was not due to any criminal investigation, but the platform was working with the authorities “to help investigate irregularities in the management of specific company funds by an author”, quoting a “fraudulent accident” as a cause.
Shortly before the announcement, the cryptocurrency wallet and trading platform Uphold terminated its partnership with Cred. Cointelegraph reported that at least one Uphold user had experienced technical issues with the platform’s CredEarn program allegedly caused by Cred. Following the dissolution of the Uphold partnership, the user claimed to have approximately $ 140,000 in Bitcoin (BTC) and other assets locked in his Cred account.
Cred has She said none of its systems, customer accounts, or customer information were compromised in the “fraudulent incident,” but as of October 30 it has not released an update on Twitter or presumably by email to its users regarding the resources to which it log in using the platform.
“We just want to know that our funds are safe”, She said Twitter user Zijin Huang. “Address this issue in your next update, not an announcement for the next announcement.”
The platform has now updated its website to include Chapter 11 archiving information, but many users have not received the message. Crypto Twitter user AwsomeNada claimed that they had 7,250 XRPs – approximately $ 1,829 at the time of publication – deposited on their last transaction before the inflows and outflows of funds were suspended.
“I want to know how this can be solved,” AwsomeNada said. “I need my money back today.”
Users done similar claims of losing access to “thousands of XRPs” and other assets without hearing whether their funds were safe during the bankruptcy process.
Are our funds we invested with Cred still safe with this Chapter 11 bankruptcy?
– Matthew Longest (@ MattLongest6) November 8, 2020
While both inflows and outflows of funds will apparently remain inaccessible as Cred goes through the Chapter 11 process, other exchanges have also given users reason to see the meaning behind “not your keys, not your coins”. Digital asset withdrawals have been closed on cryptocurrency exchange OKEx since Oct. 16 amid rumors that police have arrested its founder.
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