Cred crypto fraud 2025 is back in the spotlight as two former top executives — CEO Daniel Schatt and CFO Joseph Podulka — plead guilty to misleading investors and concealing major financial risks. The U.S. Department of Justice revealed that both executives signed plea deals admitting their roles in one of the largest crypto lending fraud cases to date.
Cred Crypto Fraud 2025: Executives Misled Investors
The Cred crypto fraud 2025 case centers around how the company operated between 2018 and 2020. Schatt and Podulka admitted to:
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Promoting Cred as a low-risk crypto lending platform
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Concealing the platform’s exposure to MoKredit, a Chinese firm issuing unsecured microloans
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Misrepresenting Cred’s lending practices as fully secured
They acknowledged that these misrepresentations were intended to boost customer participation in crypto-backed loans through Cred.
MoKredit Exposure and the 2020 Bitcoin Crash
At the heart of the Cred crypto fraud 2025 investigation is MoKredit. While Cred claimed to specialize in secured lending, a large portion of its credit portfolio was tied to high-risk loans issued by MoKredit to online gamers in China.
When Bitcoin’s price crashed 40% in March 2020, Cred failed to meet margin requirements. The platform’s liquidity crisis soon spiraled out of control, leading to a bankruptcy filing in November 2020. Over $150 million in customer funds were lost.
Legal Proceedings in the Cred Crypto Fraud 2025 Case
As part of their plea agreements, Schatt and Podulka admitted to 13 counts of fraud and money laundering. Federal prosecutors have recommended:
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72 months in prison for Daniel Schatt
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62 months in prison for Joseph Podulka
Sentencing is set for August 26, 2025, in California. Meanwhile, former Chief Commercial Officer James Alexander also faces similar charges. If convicted, he could receive up to 20 years in prison and $250,000 in fines.
These revelations mark another chapter in the Cred crypto fraud 2025 case, which continues to highlight the lack of oversight in the crypto lending industry.
Assets Gained Value but Remain Locked
In May 2024, the DOJ reported that crypto assets tied to the Cred crypto fraud 2025 victims had appreciated to $783 million in value. However, access to these funds remains limited, and many victims are still in legal limbo.
The contrast between asset growth and investor losses has renewed debate about regulatory protections in crypto finance.
Conclusion: Lessons From the Cred Crypto Fraud 2025 Scandal
The Cred crypto fraud 2025 case shows how even well-known crypto platforms can conceal high-risk strategies behind polished branding. The scandal also echoes the downfall of other lending giants like Celsius, whose CEO also pleaded guilty in 2024.
As the sentencing date approaches, the case serves as a reminder that fraud in decentralized finance is not invisible — and accountability is coming, one case at a time.
