Cred faced backlash when the US-based crypto exchange platform filed for bankruptcy protection under Chapter 11 past weekend.
The company had sought protection against the possible bankruptcy. Soon after the customers of the exchange found about the filing, unrest was caused immediately. Many of the customers were found complaining and claimed that they wanted to know what is going to happen to their funds. They showed huge concern over the safety of their funds. It has been told that many customers had lodged withdrawal requests so that they can move funds to somewhere else.
Further details suggested that the bankruptcy protection papers have been filed by Daniel Shcatt who is the CEO of Cred. It was told that the Court in the District of Delaware will hear and decide upon the case. It was further told that the case was filed on 7th November.
In the filing Cred had evaluated its assets to be of US$ 50 to 100 Million. It has been further disclosed that the current liabilities it owes to creditors is about US$ 100 to 500 Million. A spokesperson of the company claimed that the filing had nothing to do with any investigation.
Earlier in October, Cred had tweeted that it will soon suspend its deposit and withdrawal for at least two weeks. The reason was told that the company was assisting local investigation authorities in an investigation. It was told that a fraudulent activity had taken place regarding some corporate funds and Cred was helping in apprehending culprits.
Following the events, Uphold – a digital wallet – had also annulled its partnership with the company. At that time Cointelegraph had unearthed that a fraud had been committed upon a user of Cred. It was told that in the fraud, the customer’s confidential information got breached and handed over to scammers.
However, the exchange remained silent about the incident and never provided any update on the issue. But it has recently updated information on its official website which indicated that the company had filed for bankruptcy.
Having come to know of bankruptcy filing, confusion has erupted amongst Cred’s customers. In fact every one of them want to know whether their funds lying with Cred are safe or not.