The New York Attorney General's office has taken another step in its crackdown on deceptive practices in the cryptocurrency sector, securing a $5 million settlement from Uphold.
Uphold was found to have promoted CredEarn, a savings product that promised attractive annual interest rates but turned out to be a fraudulent investment scheme.
The investigation by the Attorney General's office revealed that Uphold failed to disclose that Cred was generating returns through risky microloans to low-income borrowers in China and made false claims about comprehensive insurance coverage.
Under the settlement terms, Uphold will pay $5 million directly to affected customers and return any funds recovered from Cred's bankruptcy proceedings.