Emergency Motion Hits a Brick Wall
In the midst of chaos surrounding crypto lending firm Cred Inc., U.S. Bankruptcy Judge John Dorsey has thrown a wrench in the plans of 15 concerned customers. Their desperate plea to freeze the firm’s crypto assets on various exchanges has been denied. Apparently, the judge was not persuaded by their arguments, stating that he couldn’t act on the motion without evidence on the status and ownership of the crypto assets in question. It looks like having a fancy filing isn’t enough if you can’t back it up!
What’s Cooking in the Courtroom?
During a hearing on November 25, Judge Dorsey pointedly critiqued the investors for not putting in enough legwork to trace the assets. “At this point, all I have is the obligation of the debtors to exercise their fiduciary duty to protect the assets of the estate,” he said, shaking his head in disapproval. If this were a game of Monopoly, these investors just landed on Boardwalk but forgot their money at home!
The Next Hearing and Possible Liquidation
The judge revealed that the issue of freezing Cred’s assets would be revisited during a hearing on December 9. This hearing comes in light of a motion filed on November 18 from two Cred users advocating for a conversion to liquidation proceedings. They aren’t pulling any punches, accusing Cred of running an ‘unlicensed hedge fund’ filled with fraud that rivals the infamous Madoff scheme. Just how low can you go?
Cred’s Financial Catastrophe
The stark financial realities are hard to ignore—the company has liabilities stacking up to a staggering $136.5 million, while its estimated liquid assets merely scrape 10% of that. If you thought finding a good deal on Black Friday was tough, try finding some assets in this debacle!
Accusations and The Great Escape
Speaking of tough situations, Cred’s co-founder and CEO, Daniel Schatt, recently made explosive claims about the firm’s former chief capital officer, James Alexander. Allegedly, Alexander made off with $3 million in Bitcoin back in July. Not to mention an imposter supposedly swiped 800 Bitcoin worth over $10 million from the company. It seems this blockchain drama is more tangled than your earbuds after a long run!
Wrapping Up the Woes
To add to the absurdity, just days before these hearings, Cred announced it was halting operations. Well, if you’re going to throw in the towel, might as well make it a dramatic exit! This unfolding saga leaves both customers and creditors perplexed, not knowing if they’ll see a dime of their investments again. If you thought the crypto world was complicated before, just wait! It’s a rollercoaster that seems far from over.
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