On May 13, two former leaders of Cred, a collapsed crypto lending firm, admitted to committing wire fraud, according to plea deals accepted by a federal judge in California.
Daniel Schatt, who was the company’s CEO, and Joseph Podulka, its chief financial officer, pleaded guilty as part of a deal with prosecutors.
The court set their sentencing for August 26. Wire fraud charges can lead to up to 20 years in prison and fines of $250,000 per person, or $500,000 if charged to a business. Prosecutors have suggested prison terms of up to six years for Schatt and just over five years for Podulka.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
What Are Crypto Quests? EASIEST Ways to Earn Rewards Explained
In the plea deal, Schatt and Podulka admitted they had only shared positive updates with customers while hiding information about serious problems at the company. When the firm eventually went bankrupt, customers lost a combined total estimated between $65 million and $150 million.
At the time of its bankruptcy, Cred said it owed customers about $150 million. However, by May 2024, the US Department of Justice noted that the remaining assets tied to the company had increased in value and were now worth more than $780 million.
Prosecutors also said that Cred gave investors the wrong idea about how their money was being handled. Much of its lending activity relied on MoKredit, a Chinese firm that gave small, unsecured loans to gamers.
On May 9, German authorities took down the cryptocurrency exchange eXch and seized approximately $38 million worth of digital assets. What happened? Read the full story.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
