Earlier this year, Edge integrated the service Cred in our application, providing our users with the much requested functionality of earning interest on their crypto assets. Given the custodial nature of the service, Edge went through over a month of due diligence to best understand the product and the team at Cred. We met with their leadership team several times both in person and online before feeling comfortable offering their service to our users. Their transparency and known leadership with financial and technology giants like PayPal, Intuit, and Wells Fargo helped gain our trust and faith that the team had the best intentions with their product and service.
On October 27, Cred announced that there had been an incident in the company that negatively affected their balance sheet, including user deposited assets. From conversations with their leadership team, it is our understanding that a previous staff member at Cred allowed a significant portion of user deposited funds to be invested in a fraudulent asset manager. An asset manager is an entity that provides a yield on lent assets. The asset manager in question was a nonexistent and fraudulent entity. The staff member that did the due diligence in approving this asset manager has since been terminated, and an investigation is ongoing to determine whether or not they had committed fraud in approving the asset manager or if this was simply gross negligence. Cred has initiated a federal investigation on this previous staff member and asset manager in an attempt to recover funds. Due to this incident, Cred is no longer able to fulfill its debt to customers and has therefore filed for Chapter 11 bankruptcy. It is through these proceedings that remaining assets in Cred will be appropriately distributed back to lenders and customers.
Unfortunately, this incident makes it unlikely that all users will be able to recover all funds deposited in Cred. If you would like to follow the status of the bankruptcy proceedings you can do so through this link. Any users of Cred should have already received an email from them with this link as well. It is our hope that the proceedings will allow Cred users to be returned as much of their funds as possible. .
If you were a Cred user and had deposited funds, you can see your account balance by following the instructions below:
- Go to this URL https://earn.mycred.io/edge
- Click Log in
- Click Forgot Password
- Enter email address used when signing up with Cred
- Click Reset password
- Once you get the email click the link to reset password
- Now log into Cred dashboard by accessing https://earn.mycred.io/edge and entering your new credentials
If you face any issues reach out to firstname.lastname@example.org
The team at Edge is sincerely sorry for the loss our users may have incurred from using Cred. Unfortunately, we have no control over the management of funds in Cred. Any users of Cred signed an agreement explicitly with Cred and not with Edge. I myself and other members of our staff and family have also committed funds to Cred, and are experiencing the same concern over our assets. At this time we have chosen not to pursue direct legal action against Cred as we feel the cost and the time impact of a lawsuit only takes away from the funds that could be returned back to our users.
This incident has been a critical lesson for us at Edge and helps reaffirm our ideology behind self custody and its benefits. Since the founding of Edge, we have been a strong proponent of self custody, autonomy, privacy, and the general benefits brought by cryptocurrency and decentralized technologies. The debate rages on with regard to the risks involved with self custody versus centralized custodial services such as Cred. While self custody is difficult and has notable technology risks, we feel that the benefits outweigh these risks versus custodial services, which have stifled financial access from the majority of our population. We strongly hesitated in offering a custodial service in Edge for these reasons, but strong consumer demand for such a service had us bend our own rule for the first and last time. The advent of decentralized finance has allowed us to replace centralized financial services with noncustodial, globally accessible equivalents. Going forward, we will make a strong commitment to provide self custody and trust minimized solutions to our users.
I once again apologize to all of the users affected by this incident. All of our current and future partners will adhere to the self custody ethos we have built our company on. We are confident that this will provide a secure platform for our users, preventing future incidents of this type.
Thanks for your continued support.