New York AG Secures $5 Million Settlement from Uphold Over Crypto

Uphold HQ Inc. agreed to pay more than $5 million to compensate customers harmed by the now‑bankrupt CredEarn investment product, after the New York Attorney General’s office found the platform had misrepresented the risks and operated without proper broker registration [1].

Key takeaways

• Uphold will distribute over $5 million to roughly 2,200 investors who lost money in CredEarn [2]
• The settlement requires Uphold to register as a broker‑dealer and improve due‑diligence reviews of third‑party crypto products [1]
• Any recovery Uphold receives from Cred’s bankruptcy—about $545,000—must be passed to affected customers [1]
• Regulators said CredEarn was marketed as a “savings‑style” product while relying on risky micro‑loans to Chinese video gamers with high interest rates [2]

Settlement details and regulatory findings

The agreement, announced on April 29, 2026, resolves allegations that Uphold promoted CredEarn as a safe, “revolutionary savings product” offering up to 10 % annual yields, while the underlying loans were short‑term, uncollateralized micro‑loans often exceeding 35 % interest to young Chinese gamers lacking credit histories [3]. Between 2019 and October 2020, more than 6,000 Uphold users invested roughly $50 million in cryptocurrency into CredEarn, only to suffer losses when Cred’s lending partner, MoKredit, defaulted and Cred filed for bankruptcy in November 2020 [2].

The Attorney General’s office also highlighted that Uphold advertised “comprehensive insurance” for CredEarn, yet no such coverage existed to protect investors from the eventual losses [2]. Because Uphold facilitated transactions, received fees, and failed to register as a broker‑dealer or commodity broker‑dealer under New York law, the office deemed its conduct a violation of the Martin Act and related statutes [3].

Compliance obligations and next steps

Under the settlement, Uphold must register with the Attorney General’s office as a broker‑dealer and adopt stricter product‑review standards before offering any third‑party crypto investments [1]. The company will also notify affected investors by email and distribute the $5 million within 180 days, as stipulated in the agreement [2]. Additionally, any funds Uphold recovers from Cred’s bankruptcy—approximately $545,000—are to be transferred directly to the harmed customers [1].

Why it matters

The case underscores the heightened scrutiny New York regulators are applying to crypto platforms, treating digital assets as securities and commodities subject to traditional investor‑protection rules. By securing restitution for thousands of investors and imposing broker‑registration requirements, the settlement aims to deter misleading promotions and improve transparency in the rapidly evolving crypto lending market. The outcome also signals that future platforms offering third‑party products will likely face stricter due‑diligence and disclosure obligations, shaping compliance practices across the industry.