Ex-executives of Cred confronted with charges of wire fraud and money laundering

Three ex-executives of bankrupt cryptocurrency lender Cred have been indicted for their alleged involvement in wire fraud and money laundering prior to the company’s bankruptcy declaration in November 2020.
The United States Attorney’s Office for the Northern District of California stated on May 3 that this prosecution demonstrates their commitment to maintaining a fraud-free market that is secure for investors.
Daniel Schatt, the former CEO, and Joseph Podulka, the former CFO, are facing 13 charges of wire fraud and money laundering, while James Alexander, the former chief commercial officer, is charged with four counts.
The US Internal Revenue Service’s acting special agent in charge, Mark Mosley, described the scheme as a deceptive and predatory operation that defrauded potential victims of hundreds of millions of dollars worth of cryptocurrency at market value.


If convicted, each of the three executives could face the maximum sentence per count. Source: United States Attorney’s Office for the Northern District of California
When Cred declared bankruptcy in November 2020, concerned users took to social media to inquire about the safety of their funds.
According to prosecutors, the three executives misled customers about Cred’s lending and investment practices.
Cred allegedly claimed to engage only in collateralized or guaranteed lending, with hedged cryptocurrency investments and an all-weather investment strategy to mitigate volatility.
However, prosecutors argue that Cred engaged in lending that was neither collateralized nor guaranteed.
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Schatt and Podulka made their first appearance in court on May 2 and are scheduled to enter a plea on May 8. Alexander’s initial court date has yet to be determined.
These charges coincide with the impending sentencing hearing of Alex Mashinsky, the former CEO of crypto lender, who faces seven felony charges following the company’s collapse in July 2022.
Meanwhile, Genesis, another crypto lending firm that filed for bankruptcy in January 2023, is working towards settling its debts with creditors. On April 2, Genesis liquidated approximately 36 million shares of its Grayscale Bitcoin Trust, generating $2.1 billion.
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