Cryptocurrency lending service, Cred officially filed for Chapter 11 bankruptcy protection on Saturday, November 7th. According to CoinTelegraph, the move has left many of the US-based platform’s users to question whether or not the personal funds that are stored in the platform are safe.
The filing comes just over a week after an October 28th announcement that the platform would suspend withdrawals and deposits of funds on the platform for two weeks.
A Fraudulent Incident
At the time, Cred posted a statement on Twitter to reassure users that the suspension did not take place because the company was under criminal investigation, rather the company said that the filing was an attempt “to maximize the value of its platform for its creditors.” Cred listed its estimated assets at between $50-100 million and its estimated liabilities between $100-500 million.
1/2 We would like to further clarify that Cred is not under investigation.
Cred approached law enforcement to help investigate irregularities in the handling of specific corporate funds by a perpetrator.
— Cred (@ihaveCred) October 30, 2020
For example, Crypto Twitter user, AwsomeNada wrote that he “[needs his] money back today,” and claimed to have deposited 7,250 XRP in his Cred account before fund inflows and outflows were suspended.
“I want to know how this can be resolved,” he wrote.
This is not the only recent incident in which customer funds stored on a crypto platform have been inaccessible for more than a week. After the arrest of its founder, OKEx suspended customer withdrawals and deposits of funds on October 16th; they have not yet been resumed.