- Daniel Schatt and Joseph Podulka have admitted to wire fraud in federal court
- The executives have acknowledged misleading customers about Cred’s financial health
- Their actions have led to over $150 million in losses and the company’s 2020 bankruptcy
Former Cred CEO Daniel Schatt and CFO Joseph Podulka have pleaded guilty to wire fraud charges, admitting they misled customers about the crypto lender’s financial condition and lending practices. Their deception led to the company’s collapse in 2020, leaving investors out more than $150 million. The guilty pleas mark a key milestone in ongoing efforts to hold crypto executives accountable amid rising regulatory scrutiny.
Executives Showed “Flagrant Disregard for the Truth”
On May 13, 2025, Schatt and Podulka entered guilty pleas in a California federal court, acknowledging that they defrauded customers by concealing the company’s true financial position. According to prosecutors, the pair promised stable returns while the company took outsized risks behind the scenes; Schatt and Podulka admitted to knowingly making false representations about Cred’s lending strategy and the safety of customer funds.
Following the charges in May 2024, U.S. Attorney Ismail Ramsey stated that the allegations highlighted a “predatory, deceptive scheme defrauding potential victims of hundreds of millions of dollars of cryptocurrency at market value.”
Risky Lending Collapsed Company
Cred filed for bankruptcy in November 2020 following a cascade of losses from risky lending arrangements. The company marketed itself as a secure crypto lending platform, but investors later discovered that funds had been mismanaged and lent to questionable counterparties. The fallout from the scandal added fuel to the growing concerns about the lack of oversight and consumer protections in the digital asset space.
Both executives now face up to 20 years in federal prison, with sentencing scheduled for later this year. Their cooperation with authorities may be taken into account, but prosecutors have signaled that significant penalties are warranted given the scale of the fraud.
