Crypto exchange Uphold has opposed owing nearly $784 million to the liquidation trust of bankrupt crypto investment company Cred, as reported by Cointelegraph.
According to Cointelegraph, on January 11, 2023, Uphold submitted a motion for removal of all counts in the suit served against the firm by Cred in June, 2022. Reportedly, in June, 2022, Cred’s liquidation trust applied for an adversary complaint against Uphold and two other affiliates.
On the basis of information by Cointelegraph, insights from the lawsuit highlighted that Cred stated about Uphold’s involvement with its co-founders to promote CredEarn. It is believed that the product assured high returns which reportedly attracted retail investors. However, Cred’s investments became unfavourable which resulted in customer losses and a bankruptcy filing in November, 2020. Furthermore, the suit emphasised on Uphold being conscious about Cred “implementing a highly risky hedging strategy and that there was regulatory risk associated with cryptocurrency yield earning programs.” Zachary Taylor of Baker & Hostetler, Uphold’s attorney, informed the court that “unsupported speculation is all the trust has,” before adding “it makes no sense.”
Moreover, Cointelegraph noted that Uphold disproved allegations around knowing Cred’s risks, claiming Cred was functioning on an independent basis. It also claimed to be unaware of Cred’s financial constraints when it promoted the product to Uphold customers. CredEarn “was owned, managed, and operated independently by Cred, and it was internal fraud and mismanagement that caused Cred’s downfall,” it read.
(With insights from Cointelegraph)