Two former top executives of the now-defunct crypto lending firm Cred have pleaded guilty to wire fraud charges in connection with the company’s 2020 bankruptcy that left customers with millions in losses. Former CEO Daniel Schatt and former CFO Joseph Podulka admitted to the charges as part of a plea deal reached with federal prosecutors, according to a May 13 court filing in the U.S. District Court for Northern California. U.S. District Judge William Alsup accepted the guilty pleas and scheduled sentencing for August 26. Each executive faces up to 20 years in prison and fines up to $250,000. Businesses convicted of wire fraud can face up to $500,000 in penalties. According to court documents, Schatt and Podulka acknowledged misleading investors by only sharing positive updates about the firm while withholding negative developments. The aim, prosecutors said, was to convince customers to deposit their digital and fiat currencies with Cred under false pretenses. Customer Losses Reached $150M Cred filed for bankruptcy in November 2020, leaving thousands of customers with estimated losses of up to $150 million. As part of their plea deal, Schatt and Podulka admitted that their actions directly led to user losses ranging from $65 million to $150 million. Despite the initial devastation, the U.S. Department of Justice noted in a May 2024 update that assets recovered from the case had appreciated and now hold a market value of over $783 million. However, that has not prevented legal action from proceeding against those deemed responsible. The executives were initially charged with 13 counts of wire fraud and money laundering. Prosecutors are also recommending a prison sentence of up to 72 months for Schatt and up to 62 months for Podulka. Crypto Fraud Cases Continue to Mount Former chief commercial officer James Alexander has also been charged in the same case. The prosecution also argued that Cred misrepresented its risk exposure, falsely claimed that all lending was collateralized, and failed to disclose its dependence on unsecured microloans issued by Chinese company MoKredit. Cred is just one of several crypto companies facing legal scrutiny in recent months. On May 8, former Celsius CEO Alex Mashinsky was sentenced to 12 years in prison for fraud. Earlier this year, Travis Ford, co-founder of Wolf Capital, pleaded guilty to wire fraud conspiracy after raising over $9 million from investors with false promises of high returns. The post Cred Executives Plead Guilty to Wire Fraud Amid $150M Collapse appeared first on TheCoinrise.com .
