The U.S. based leading cryptocurrency lending service Cred has filed for Chapter 11 bankruptcy protection earlier on Saturday, leaving many purchasers checking out solutions to secure their funds.
In line with the court documents, the legal team for Cred CEO Daniel Schatt filed bankruptcy papers for the firm within the District of Delaware on 7th Nov.
Cred listed its estimated assets at between $50-100 Mln and its estimated liabilities between $100-500 Mln. Within an official statement issued, the firm added that it had filed for Chapter 11 in an effort “to maximize the worth of its platform for its creditors.”
The bankruptcy filing comes following a 28th Oct. announcement the platform would be suspending fund inflows and outflows for 2 weeks. Cred stated on Twitter that the suspension wasn’t due to any criminal investigation, but the platform was working with authorities “to help investigate irregularities within the of specific corporate funds by a perpetrator,” citing a “fraudulent incident” as the cause.
Shortly prior to the announcement, crypto wallet, and trading platform Uphold terminated its collaboration with Cred. As reported that a minimum of one Uphold user had been having technical issues with the platform’s CredEarn program illicitly caused by Cred. Following the dissolution of the Uphold collaboration, the user claimed that he had roughly $140k in Bitcoin [BTC] and other assets locked in his Cred account.
Cred has added that none of its systems, user accounts, or customer info were compromised within the “fraudulent incident,” but has not issued an update on Twitter or purportedly by email to its users since 30th Oct. regarding assets accessed using the platform.
“We just want to understand that our funds are safe,” said one Twitter user. “Please address this on your next update, not an announcement to subsequent announcement.”
The platform has now updated its website to incorporate info on the Chapter 11th filing, but many users didn’t get the message. Cryptocurrency Twitter user AwsomeNada claimed to possess 7,250 Ripple [XRP] – roughly $1,829 USD at the time of reporting – deposited on their last transaction before fund inflows as well as outflows were suspended.
“I want to understand how this will be resolved,” said AwsomeNada. “I need my funds back today.”