Former executive of cryptocurrency lending company Cred admits to telecom fraud allegations

According to Cointelegraph, former CEO Daniel Schatt and CFO Joseph Podulka of the bankrupt cryptocurrency lending platform Cred have pleaded guilty to telecom fraud charges in federal court in California. According to the plea agreement, the two individuals admitted to inducing clients to lend funds through selective disclosure of information, resulting in users losing $65 million to $150 million. The judge is scheduled to deliver the verdict on August 26th, and the prosecution recommends sentences of 72 months and 62 months respectively. After a 40% drop in Bitcoin in March 2020, Cred was on the brink of bankruptcy due to its inability to meet margin requirements, but executives still concealed risks from new clients. The investigation shows that the platform actually relies on MoKredit's unsecured small loan business, contrary to its claimed&34; Fully collateralized lending&34; The mode does not match. When Cred went bankrupt in November 2020, its clients suffered losses exceeding $150 million, but some of its assets are now valued at $783 million.