Uphold pays $5M for misleading CredEarn promotion

Uphold will pay $5M to New York for misleadingly promoting CredEarn as a safe, insured crypto product, without disclosing high-risk lending and nonexistent insurance.

Uphold has agreed to pay over $5 million in restitution to New York after settling with the Attorney General regarding its promotion of the CredEarn crypto savings product. Between January 2019 and October 2020, Uphold marketed CredEarn as a safe, insured savings option with attractive returns. However, the company failed to disclose that the yields were generated from high-risk microloans to low-income video game players in China, and that the advertised insurance did not exist. Regulators found that Uphold did not provide adequate risk disclosures and operated without proper registration as a broker or commodity broker-dealer. The settlement will return funds to affected customers and highlights the importance of transparency and investor protection in crypto product marketing.