Cred Execs Admit to Fraud After $150 Million Collapse, Face Years in Prison

Daniel Schatt, who was the company’s CEO, and Joseph Podulka, its chief financial officer, pleaded guilty as part of a deal with prosecutors.

The court set their sentencing for August 26. Wire fraud charges can lead to up to 20 years in prison and fines of $250,000 per person, or $500,000 if charged to a business. Prosecutors have suggested prison terms of up to six years for Schatt and just over five years for Podulka.

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In the plea deal, Schatt and Podulka admitted they had only shared positive updates with customers while hiding information about serious problems at the company. When the firm eventually went bankrupt, customers lost a combined total estimated between $65 million and $150 million.

At the time of its bankruptcy, Cred said it owed customers about $150 million. However, by May 2024, the US Department of Justice noted that the remaining assets tied to the company had increased in value and were now worth more than $780 million.

Prosecutors also said that Cred gave investors the wrong idea about how their money was being handled. Much of its lending activity relied on MoKredit, a Chinese firm that gave small, unsecured loans to gamers.

On May 9, German authorities took down the cryptocurrency exchange eXch and seized approximately $38 million worth of digital assets. What happened? Read the full story.