Former Cred Executives Sentenced to Prison for Defrauding $150 Million

A U.S. federal judge has sentenced two former executives of the collapsed crypto lending platform #CRED to nearly 8 years in prison. Daniel Schatt, former CEO, was sentenced to 52 months in prison, and Joseph Podulka, former CFO, received a 36-month sentence. Both pleaded guilty to conspiracy to commit wire fraud in May.

Fraud and Consequences

These former executives deceived customers about Cred's financial situation while secretly transferring 80% of customer assets into high-risk loans for Chinese gamers. When this scheme collapsed in 2020, more than 440,000 customers lost $140 million, now worth over $1 billion at market value. #china

Lesson on Accountability

Legal experts believe this sentence sets an important precedent regarding the accountability of executives in crypto fraud cases. The prison sentence was determined based on the level of involvement, scale of damage, and cooperation of the defendants. Ishita Sharma, a lawyer specializing in crypto, noted that courts are increasingly considering the reputational damage to the entire crypto industry when sentencing. She also recommends that crypto companies proactively be transparent and disclose information instead of exploiting legal loopholes. #scam