Letitia James has secured more than $5 million from Uphold in a settlement tied to a failed crypto savings product.
The case centers on CredEarn — a product Uphold promoted between 2019 and 2020 as a way for users to earn interest on their crypto. It was actually run by Cred LLC.
According to New York regulators, the problem was simple: users weren’t clearly told about the risks.
The Attorney General’s office said funds placed into CredEarn were used to make risky loans — including to borrowers in China who had little or no credit history. At the same time, customers were told the product was safe and even described as having “comprehensive insurance.”
Regulators say that wasn’t true.
When Cred LLC ran into trouble in 2020, it eventually filed for bankruptcy. That left many users with losses after trusting the product.
Now, under the settlement:
- Uphold will pay over $5 million directly to affected users
- Any money it later recovers from Cred’s bankruptcy will also go to those customers
The state also raised another issue — registration.
New York says Uphold was operating without the proper licenses required under its laws, which treat many digital assets as commodities. That added more pressure in the case.
Uphold, however, is not fully agreeing with the state’s version of events. CEO Simon McLoughlin said he strongly disagrees with parts of the findings and called the claims inaccurate.
This case is part of a bigger pattern.
New York has been actively going after crypto companies it believes are breaking rules or misleading users. The focus has been on investor protection — especially after several high-profile failures in the crypto space.
At the same time, there’s still a broader fight happening between state and federal regulators over who controls different parts of the crypto market.
But for now, the message from New York is clear:
If crypto platforms promote financial products, they need to be transparent about risks — or face consequences.
