NY AG Secures $5M From Uphold Over CredEarn Crypto Lending Product

The New York Attorney General's office dropped a hammer on April 29, 2026, forcing Uphold HQ Inc. to cough up more than $5 million for fleeced CredEarn customers—a crypto lending product that promised to turn your sats into interest-bearing glory. The eighteen-month promotional ride, running from January 2019 through October 2020, apparently occurred without Uphold bothering to register as a broker or commodity broker-dealer under New York law, a paperwork omission regulators tend to frown upon. The repayment deal amounts to over five times what Uphold collected in fees from the arrangement, with distributions heading to battered investors worldwide who watched their deposits evaporate when Cred went belly-up. Because nothing says "due diligence" quite like five years of your money back on a product that imploded six years ago.

The NY AG's probe uncovered that CredEarn was dressed up in savings-clothing, complete with that sweet annual percentage yield marketing that makes degens forget they're holding unregulated financial instruments. Meanwhile, Cred was apparently playing venture capitalist to Chinese gamers earning peanuts, handing out loans to players with zero credit history and zero access to traditional financing. The product's salesmanship apparently failed to mention that "we're betting your crypto on video game loans in Shenzhen" might not be the rock-solid investment thesis it appeared to be. Regulators noted the marketing painted a rather optimistic picture of the underlying risk buffet investors were actually eating from.

"Investors should be able to trust the industry advice they receive, and my office will always work to work to ensure bad actors are held accountable for endangering their customers' financial security," noted New York Attorney General Letitia James, apparently unfazed by the irony of crypto investors seeking trusted advice. Uphold had helpfully stated that Cred carried "comprehensive insurance," though it turns out "comprehensive" meant "absolutely none" when it came to protecting retail traders from digital asset investment losses. Cred started hemorrhaging losses in March 2020 after its sketchy lending practices and questionable management decisions, eventually filing for bankruptcy in November 2020—because apparently "gaming loans in China" was the hot new DeFi strategy nobody asked for.

Beyond the customer restitution, the settlement mandates Uphold clean up its vetting process before hooking up with or peddling third-party investment products, plus registering as a broker with the Attorney General's office. The company must also forward any money it claws back from Cred's bankruptcy proceedings to impacted customers. Uphold is sitting on $545,189 in claims from the Cred bankruptcy case, and investors can expect emails from Uphold explaining the fund distribution process—because nothing says "customer service excellence" like a cryptocurrency exchange explaining bankruptcy logistics.

"When crypto companies break the law and mislead investors, the consequences can be devastating to New Yorkers' livelihoods," James stated, perhaps tired of explaining that "crypto" doesn't exempt companies from following rules written before Satoshi mined the genesis block. The settlement showcases the NY AG's ongoing campaign to treat cryptocurrency like the financial market it actually is, complete with investor protection enforcement under the Martin Act of 1921—a law so old it predates Bitcoin by roughly 93 years. Between 2023 and 2026, the office went after Genesis Global, Gemini, DCG, Novatechfx, Galaxy Digital, and most recently in April 2026, sued Coinbase and Gemini over prediction markets, collectively extracting more than $2.5 billion in restitution and penalties. Turns out "move fast and break things" works great until the Attorney General moves faster.