A U.S. federal court has sentenced two former executives of the cryptocurrency lending platform Cred on fraud charges. Daniel Schatt, the former CEO, received a 52-month prison sentence, while Joseph Podulka, the former CFO, was sentenced to 36 months in jail. Both had pleaded guilty to conspiracy to commit wire fraud. The case is linked to decisions made during the severe crypto market downturn in 2020, when Schatt and Podulka invested 80% of users’ funds in highly risky loans. This resulted in financial losses for approximately 440,000 users totaling $140 million, which exceeds $1 billion at current valuations. The court also imposed a $25,000 fine on each defendant and ordered three years of supervised release following their prison terms. Cred was a well-known cryptocurrency lending platform that offered loans against crypto assets but suffered significant losses due to the market crash. This case highlights the critical importance of transparency and accountability in the crypto sector to protect investors’ rights. It also signals that strict legal measures will be enforced against illegal activities in crypto finance. Investors are advised to conduct thorough research and rely only on reputable and transparent platforms to avoid financial losses.
Source: binance
