Cred
A San Francisco crypto lender (CredEarn, offered via Uphold) that collapsed into bankruptcy in November 2020 with customer losses later valued at $783M+. The DOJ said executives falsely marketed it as 'collateralized,' 'hedged,' and insured; CEO Daniel Schatt and CFO Joseph Podulka pleaded guilty.
Also known as: Cred, Cred LLC, CredEarn
Summary
Cred LLC was a San Francisco-based crypto lending firm whose "CredEarn" program — marketed heavily through the Uphold exchange as "safe," "secured," "insured," and "fully hedged" — let customers lend their crypto for yield. Cred filed for bankruptcy in November 2020, one of the first major U.S. crypto bankruptcies, with customer losses the DOJ later valued at more than $783 million. [1][2]
The fraud
Per the DOJ, from no later than March 2020 executives made false statements: that Cred only did collateralized/guaranteed lending, hedged its crypto investments, and had comprehensive insurance. In reality much of the lending was uncollateralized and concentrated, its hedging ended, and a major borrower could not repay — which the executives concealed. [1][2]
Outcome
In May 2024 the DOJ indicted CEO/co-founder Daniel Schatt, CFO Joseph Podulka, and CCO James Alexander. Schatt and Podulka pleaded guilty to wire-fraud conspiracy in May 2025 and were sentenced in September 2025 to 52 and 36 months, respectively. [1][2]
Bracketed numbers refer to the numbered sources listed below.
People & entities involved
- Daniel SchattCo-founder & CEOIndividualsCo-founder and CEO of the crypto lender Cred. He pleaded guilty in 2025 to wire-fraud conspiracy for misleading customers about Cred's collateralization, hedging, and insurance, and was sentenced to 52 months in prison.
- Joseph PodulkaCFOIndividualsFormer CFO of the crypto lender Cred. He pleaded guilty in 2025 to wire-fraud conspiracy over Cred's misleading marketing and was sentenced to 36 months in prison.
Sources (2)
See also
Gala Games exploitTokensOn May 20, 2024 an attacker abused a privileged minter account on the GALA token contract to mint 5 billion GALA (≈$200M+ nominal) and dumped ~600M of them for ~$22M of ETH before Gala froze the address. Gala Games called it an internal access-control failure; the attacker later returned the ~$22M.
HEX / PulseChain (Richard Heart)ProjectsCrypto projects (HEX, PulseChain, PulseX) created by Richard Heart (Richard Schueler). In July 2023 the U.S. SEC sued him for offering unregistered securities that raised $1B+ and for allegedly misappropriating ~$12M for luxury goods (including a 555-carat diamond). A court dismissed the case in 2024 for lack of U.S. jurisdiction; there was no finding of wrongdoing and Heart denies the allegations.
This page was last updated on Jun 15, 2026. View revision history.
