NY Attorney General Secures $5M from Uphold in Crypto Investor Compensation

The New York Attorney General's office has secured a $5 million settlement from Uphold to compensate customers affected by CredEarn, a third-party crypto investment product.

CredEarn was offered through Uphold's platform and mobile app from January 2019 to October 2020. It provided annual interest to customers who placed cryptocurrency with Cred, but the Office of the NY Attorney General found that this was presented as a savings-style option while Cred generated returns through risky lending activity.

Uphold must register as a broker and improve its due diligence policies before partnering with or recommending third-party investment products. This case highlights the regulatory exposure of offering third-party crypto products through customer-facing platforms.