New York Attorney General Letitia James announced a settlement on April 29, 2026, securing more than $5 million from crypto platform Uphold over its promotion of CredEarn, a third-party investment product that left thousands of customers with millions of dollars in losses after the collapse of Cred LLC.
What New York Alleges in the Uphold and CredEarn Case
The settlement record states that over 6,000 Uphold customers invested approximately $50 million worth of cryptocurrency into CredEarn through the Uphold platform between 2019 and October 2020. CredEarn was a yield-bearing product operated by Cred LLC, which promised returns on deposited crypto assets.
After Cred collapsed, investors who used Uphold’s platform lost over $34 million, according to the same filing.
Under the terms of the Assurance of Discontinuance, Uphold agreed to pay $5,000,000 in damages to fund a reimbursement pool for eligible customers.
In addition, any initial distribution Uphold receives on its $545,189.97 general unsecured claim in the Cred bankruptcy proceeding must be added to the reimbursement pool. The two-part structure means total customer recovery could exceed the headline damages figure.
Why the Settlement Matters for Crypto Marketing and Registration Rules
The Office of the Attorney General found that Uphold made material misstatements or omissions when promoting CredEarn to its users. New York’s investigation concluded that the platform marketed the product in ways that downplayed risk, including claims that suggested customer funds were safe or insured.
The state also alleged that Uphold operated as both a broker and commodity broker-dealer under New York law without obtaining the required registration. The enforcement action was brought under the Martin Act and Executive Law Section 63(12), two of New York’s broadest anti-fraud statutes.
Central to the regulator’s theory is that CredEarn functioned as an unregistered investment contract. When a crypto platform distributes a third-party yield product, that activity can trigger disclosure and registration duties, even if the platform itself does not manage the underlying funds. At a time when debate continues over federal crypto legislation, New York’s action illustrates how state-level regulators are already applying existing securities frameworks to digital asset intermediaries.
The settlement goes beyond monetary penalties. Uphold must implement risk-based due diligence procedures for any future third-party partnerships, with customer reimbursement procedures overseen by the OAG. That forward-looking compliance requirement signals that New York expects platforms to vet yield products before offering them to retail users.
“Uphold promoted risky investments and misled its customers to believe they were safe.”
Uphold Pushes Back as Investors Wait for Reimbursement
Uphold issued a public statement disputing the attorney general’s characterization of the case. According to the company’s post-settlement press release, Uphold says it did not knowingly promote Cred’s fraud, was itself a victim of Cred’s deception, and did not admit liability in the settlement.
“We are deeply disappointed by the New York Attorney General’s statement.”
— Simon McLoughlin, Uphold CEO
Regardless of the dispute over responsibility, the settlement lays out specific steps for affected users. Eligible investors must click “Accept Reimbursement Funds” within the Uphold platform to claim their share of the settlement pool.
Investors with U.S. addresses are set to receive reimbursement in U.S. dollars. Eligible investors outside the United States will receive stablecoins greenlisted by the New York State Department of Financial Services. The dual-currency approach reflects a maturing regulatory environment that increasingly accounts for how crypto users actually hold and receive value.
The case arrives during a period of broader market stabilization, with equities and crypto markets both showing resilience despite ongoing enforcement activity. For the more than 6,000 customers affected by the CredEarn collapse, the immediate next step is to check their Uphold accounts for the reimbursement prompt and the OAG’s forthcoming distribution timeline.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
