New York Attorney General Letitia James announced on April 29, 2026, that Uphold HQ Inc. will pay more than $5 million in customer compensation tied to CredEarn, a third-party crypto investment product from Cred LLC. The settlement focuses on investor repayment, product-review standards, and registration requirements for platforms offering outside digital asset products.
The CredEarn Case: Misleading 'Savings' with High-Risk Lending
Uphold made CredEarn available through its platform and mobile app from January 2019 to October 2020. The product offered annual interest to customers who placed cryptocurrency with Cred. The Office of the NY Attorney General found that customers were given a savings-style presentation, while Cred generated returns through risky lending activity. Those loans went to video game players in China with low monthly incomes, no credit histories, and no access to traditional Chinese credit. Uphold also stated that Cred had “comprehensive insurance,” although no coverage protected retail investors from digital asset investment losses.
“Investors should be able to trust the industry advice they receive, and my office will always work to ensure bad actors are held accountable for endangering their customers’ financial security,” James said. The investigation also found that Uphold promoted CredEarn without registering as a broker or commodity broker-dealer under New York law.
Settlement Terms: Compensation Exceeds Fees Fivefold
The repayment plan directs $5 million to customers who suffered losses — more than five times the fees Uphold collected from the arrangement. Uphold must also transfer any recovery it receives from Cred’s bankruptcy proceedings ($545,189 currently owed) to affected customers. Investors will receive an email from Uphold explaining that funds will be distributed to their accounts.
Under the settlement, Uphold must maintain and improve its due diligence policies before partnering with or recommending third-party investment products. The company will also register as a broker with the Office of the Attorney General. Cred later suffered losses beginning in March 2020 after risky lending practices and mismanagement, filing for bankruptcy in November 2020, causing thousands of Uphold customers worldwide to lose millions of dollars.
Broader Enforcement Context: New York’s Crypto Crackdown
The Uphold settlement is part of a broader NY AG enforcement record that has treated crypto as a financial market subject to investor protection rules. Using the Martin Act of 1921, the office has pursued financial fraud without proving intent. Crypto activity began as early as 2014 with inquiries into the “shadow” market, expanding through the 2018 Virtual Markets Integrity Initiative, the 2019 Ifinex/Bitfinex/Tether case, the 2021 Coinseed shutdown, and lending platform actions including BlockFi. From 2023 to 2026, larger cases included Genesis Global, Gemini, and DCG; Novatechfx; Galaxy Digital; Uphold; and April 2026 lawsuits against Coinbase and Gemini over prediction markets. Those actions secured more than $2.5 billion in restitution and penalties, while pushing major firms to adjust compliance for New York market access.
“When crypto companies break the law and mislead investors, the consequences can be devastating to New Yorkers’ livelihoods,” James said. The resolution closes the matter with customer repayment, broker registration, and stronger review standards for third-party crypto investment offerings.
Industry Implications
The case underscores how third-party crypto products can create regulatory exposure when offered through customer-facing platforms. The settlement forces Uphold to implement rigorous due diligence and registration procedures, setting a precedent for how crypto platforms handle external investment products. As regulatory scrutiny intensifies across the U.S., similar settlements and enforcement actions are expected to accelerate.