New York Attorney General Letitia James secured a $5 million settlement with Uphold HQ, Inc. on April 29, 2026, resolving allegations that the platform promoted CredEarn, a fraudulent crypto investment product, to retail customers. The action marks a significant expansion of enforcement risk for platforms that market third-party yield products, even when they are not the direct issuer.
The Assurance of Discontinuance requires Uphold to compensate affected customers and strengthen its product-review and registration practices. Brought under New York’s Martin Act, the case signals heightened scrutiny of co-marketing, due diligence and broker-registration obligations in crypto yield arrangements.
My office secured over $5 million from Uphold, a cryptocurrency platform, for misleading people and promoting a fraudulent investment scheme.
I'll always work to ensure bad actors are held accountable for putting people's livelihoods at risk.
— NY AG James (@NewYorkStateAG) April 29, 2026
CredEarn Was Marketed as Safer Than It Was
The Attorney General’s investigation found that Uphold promoted CredEarn between January 2019 and October 2020 while presenting it as a safe, insurance-protected savings alternative. The inquiry concluded those representations were false.
According to the findings, CredEarn generated returns through speculative microloans to low-income video game players in China, a borrower group without traditional credit histories. The Attorney General also found that no industry insurance existed to cover the type of digital-asset losses involved.
Customers had entrusted about $50 million to CredEarn through Uphold, with realized losses exceeding $34 million after Cred collapsed in 2020. Under the settlement, Uphold must use the $5 million payment to provide direct compensation to affected customers.
The agreement also requires Uphold to transfer any recoveries from Cred’s bankruptcy estate to impacted investors. Uphold holds an unsecured claim of $545,189 in that proceeding.
Platforms Face Higher Product-Vetting Expectations
The settlement requires remediation funds to be deposited directly into customer Uphold accounts. U.S. users will receive funds in dollars, while international users will receive NYDFS-approved stablecoins. Eligible customers will also receive a 90-day period for fee-free withdrawals.
Beyond compensation, Uphold must strengthen product-review protocols and comply with broker or commodity broker-dealer registration requirements under New York law. The operational message is clear: platforms cannot rely on third-party status to avoid responsibility for promoted products.
Uphold CEO Simon McLoughlin disputed the Attorney General’s characterization, saying the company was also a victim of Cred and acted promptly in October 2020 by freezing accounts and urging Cred to disclose losses. The settlement nonetheless formalizes expectations around disclosure accuracy, counterparty diligence and registration status.
The case will likely reshape partner-vetting standards across crypto platforms. Firms that promote yield products will need documented product reviews, clearer counterparty-risk disclosures and verified registration analysis before bringing offerings to retail users.
New York’s use of the Martin Act reinforces a broader compliance lesson: marketing, custody, solvency review and investor-protection controls must be aligned before platforms distribute third-party crypto investment products.