“At the customers just to know if our Cred funds are safe”, said a Cred user

The United States-based cryptocurrency loan service, Cred, filed for Chapter 11 bankruptcy protection on Saturday, leaving many customers looking for solutions to obtain their funds.

According to court documents, the legal team of Cred CEO Daniel Schatt filed for bankruptcy in the Delaware district on November 7.

Cred listed its estimated assets between $ 50-100 million and its estimated liabilities between $ 100-500 million. 

In an official statement, the company  said  it had filed for Chapter 11 in an attempt to “maximize the value of its platform to its creditors”.

The bankruptcy filing came after an announcement on October 28 that the platform would suspend inflows and outflows of funds for two weeks. Cred  said  on Twitter that the suspension was not due to any criminal investigation, but the platform was working with the authorities “to help investigate irregularities in the handling of specific corporate funds by a perpetrator”,  citing  a “fraudulent incident” as the cause .

Shortly before the announcement, the cryptocurrency portfolio and the Uphold trading platform  ended  its partnership with Cred. Cointelegraph reported that at least one Uphold user was experiencing technical problems with the platform’s CredEarn program, allegedly caused by Cred. Following the dissolution of the partnership with Uphold, the user claimed that he had about $ 140,000 in Bitcoin (  BTC  ) and other assets blocked in his Cred account.

Cred  said that  none of its systems, customer accounts or customer information were compromised in the “fraudulent incident”, but has not released an update on Twitter or allegedly by email to its users since October 30 about the assets accessed using the platform.

“We just want to know if our funds are safe,”  said  Twitter user Zijin Huang. “Please resolve this in your next update, not an announcement for the next announcement.”

The platform has now  updated  its website to include information about the Chapter 11 protocol, but many users did not understand the message. Crypto Twitter user AwsomeNada  claimed to  have 7,250 XRP – about $ 1,829 at the time of publication – deposited in his last transaction, before the inflows and outflows of funds were suspended.

“I want to know how this can be resolved for customers,” said AwsomeNada. “I need my money back today.”

Users  made  similar claims of losing access to “thousands of XRP” and other assets without knowing whether their funds were safe during the bankruptcy process.


While the inflows and outflows of funds appear to remain inaccessible as Cred goes through the Chapter 11 process, other exchanges have also given users reasons to see the meaning behind “neither their keys nor their coins”. Withdrawals of digital assets have remained closed to the OKEx crypto exchange since October 16 amid rumors that the police have arrested its founder.