Money laundering allegations fall heavily on the former managers of Cred
In the bankruptcy of the former lender Cred, three actors of managers were charged with allegedly engaging in wire fraud and money laundering charges related to the bankruptcy filing in November 2020.
Crypto lending fraud charges
After the preliminary hearing on May 2, the ex-CEO of Cred must state admission or denial of the offense by May 8. A press release a few days ago declared they are committed to demonstrating that those engaged in deception and fraud on markets will be prosecuted with the same zeal. Therefore, they can deliver safe markets for investors.
The case involves the two former CEOs, Daniel Schatt and Joseph Podulka, who are the respondents to 13 wire fraud and money laundering charges. The charges also go against current chief commercial officer.
Source: United States Attorney’s Office for the Northern District of California
Mark Mosley, the criminal investigation special agent in charge at the U.S. Internal Revenue Service, commented, “Its scheme was harsh, unjust, dishonest, that Crypto-Investors were fraudulently deceived out of hundreds of millions of dollars of cryptocurrency at the prevailing market price.”
Cred reportedly said he engages in nothing but “collateralized or guaranteed provided lending” and that its cryptocurrency investments are “hedged.” They alleged that it maintains an “all-weather approach” to investment to counteract the volatility.
Alleged investor deception
On the other hand, the prosecutors alleged that Cred extended numerous loans that “neither required collateral nor guarantees.” Schatt and Podulka were the first to show up in court and set to enter their plea on May 8, while Alexander’s booking date has not been set yet.
On the same day that Alex Mashinsky, the former chief executive officer of a failed crypto lender, is set to be sentenced in September 2024, he faces seven felony accusations after the firm collapsed in July 2022.
Simultaneously, Genesis, another clapped-out crypto loaning company that declared bankruptcy in early 2023, is striving to satisfy its debts with its creditors. On 2nd April, Genesis, a crypto-financial institution, dumped 36 million shares of its Grayscale Bitcoin Trust into the market, amounting to as much as $2.1 billion.
