Ny Ag Secures $5m Settlement From Uphold Over Credearn

@NewYorkStateAG Letitia James has secured more than $5 million from cryptocurrency platform @UpholdInc over its promotion of CredEarn, a yield product offered by Cred LLC that collapsed in 2020 and left thousands of users with heavy losses. The settlement, announced on April 29, 2026, marks a significant moment in crypto enforcement — and sets a new precedent for how regulators treat platforms that market third-party financial products.

What Happened With CredEarn

Between January 2019 and October 2020, Uphold offered CredEarn directly through its platform and mobile app. Uphold advertised CredEarn as a reliable savings product, when in reality, Cred was making risky loans to borrowers in China with no credit histories. Specifically, MoKredit — the Chinese microlender and main borrower of CredEarn cryptocurrency — was lending funds to Chinese video gamers in their 20s and 30s with no credit histories, at interest rates often above 35%, with uncollateralized loans ranging from $1.45 to $290 over 14 days.

In promoting CredEarn, Uphold also stated that Cred was covered by "comprehensive insurance," but no insurance that would protect retail investors from investment losses of digital assets existed in the industry. Cred began suffering heavy losses in March 2020 and filed for bankruptcy in November 2020, leaving thousands of Uphold customers worldwide with millions in losses. In total, more than 6,000 Uphold customers lost more than $34 million when Cred collapsed.

A Landmark Enforcement Action

The Uphold settlement is the first New York enforcement action to target a platform that promoted someone else's yield product, rather than the issuer of the product itself. The OAG's investigation also found that Uphold was illegally promoting CredEarn without registering as either a broker or commodity broker-dealer.

Under the terms of the settlement, Uphold must pay more than $5 million into a fund to reimburse customers harmed by CredEarn — more than five times the fees it collected for hosting the product. Uphold must also transfer any recovery it obtains from Cred's bankruptcy proceedings to affected customers; Uphold is currently owed $545,189 in that case. Going forward, Uphold must maintain and improve its due diligence policies before partnering with or recommending third-party investment products, and will also register as a broker with the Office of the Attorney General.

Uphold has pushed back on the characterisation of its role. The company categorically rejected any suggestion that it knowingly promoted Cred's fraudulent scheme, arguing that Cred deliberately and repeatedly misled Uphold, and that Uphold was itself a victim of Cred's deception. Uphold CEO Simon McLoughlin noted that the U.S. Department of Justice, in its criminal investigation of Cred, found that Uphold was a victim and was not in any way to blame for the company's actions.

The action fits into a broader pattern of New York enforcement in the crypto sector. The AG's office has used the Martin Act of 1921 to pursue financial fraud cases without proving intent, with its crypto activity dating back to 2014 and expanding through major cases including Bitfinex, Tether, Coinseed, and BlockFi. Those actions have collectively secured more than $2.5 billion in restitution and penalties.

Sources:
New York Attorney General — Official Press Release
American Banker — Why Bankers Should Read NY's Uphold Settlement Closely
Bitcoin.com News — NY AG Secures $5M From Uphold