NY AG wins $5M from Uphold over CredEarn losses

New York Attorney General Letitia James announced a settlement on April 29, 2026, that requires Uphold HQ Inc. to pay more than $5 million to customers who lost money in CredEarn and to register as a broker with state authorities. The agreement resolves claims that Uphold offered the third‑party product CredEarn on its platform from January 2019 through October 2020 without adequate disclosure or proper broker registration under New York law.

The Attorney General’s office said CredEarn was presented to users like a savings account while the product generated returns through lending activity managed by Cred LLC. Investigators found Cred extended loans to low‑income video game players in China who had little or no credit history and limited access to traditional Chinese credit. Cred represented the program as insured, but the inquiry found no insurance coverage that protected retail investors from losses.

Cred began suffering heavy losses in March 2020 and filed for bankruptcy in November 2020. The bankruptcy left thousands of Uphold customers worldwide with millions in losses. Under the settlement, Uphold must pay more than $5 million into a fund to reimburse customers harmed by CredEarn. That payment is more than five times the fees Uphold collected for hosting the product. Uphold must also transfer any recovery it obtains from Cred’s bankruptcy proceedings to affected customers; Uphold is currently owed $545,189 in that case. The Attorney General’s office said eligible investors will receive emails from Uphold explaining how funds will be distributed to their accounts.

In addition to customer repayment, the settlement requires Uphold to strengthen its due diligence and product‑review procedures before listing or recommending third‑party digital asset investment products. The company must register as a broker with the New York Attorney General’s office and put in place ongoing compliance measures tied to product vetting and disclosure. Uphold did not admit wrongdoing as part of the agreement.

In a statement, the Attorney General’s office said, “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.” The statement added that when crypto companies break the law and mislead investors, the consequences can be devastating to New Yorkers’ livelihoods.

The enforcement action follows years of scrutiny by the Attorney General’s office of cryptocurrency platforms and lending programs. Using powers under the Martin Act of 1921, the office has pursued cases involving crypto firms since 2014 and secured more than $2.5 billion in restitution and penalties through various actions. The settlement closes the office’s inquiry into Uphold’s handling of CredEarn and imposes heightened compliance obligations intended to reduce the risk of similar investor harm going forward.