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https://www.theblockcrypto.com/genesis/85329/investigating-the-downfall-of-cred-inc
Cred's downfall left more questions than answers, which is, unfortunately, common in the still-nascent cryptocurrency industry. #Bitcoin
Luckily, there is a trail of online ‘bread crumbs’
and court filings that help paint a picture. 
Cred's downfall left more questions than answers, which is, unfortunately, common in the still-nascent cryptocurrency industry. #Bitcoin
Luckily, there is a trail of online ‘bread crumbs’
and court filings that help paint a picture.
It is best to start at the inception of Libra Credit, which conducted an ICO in Q2 2018. #Ethereum
The company successfully raised $26.4M in the LBA Token offering between May 1st and May 5th, 2018.
The company successfully raised $26.4M in the LBA Token offering between May 1st and May 5th, 2018.
Little did investors know that the $LBA Token would descend toward the abyss post-ICO. 
This is an all too familiar tale from the ICO-era of digital assets.
Unfortunately for the Cred community, the damage doesn’t stop with a token that lost over 96% of its value.
This is an all too familiar tale from the ICO-era of digital assets.
Unfortunately for the Cred community, the damage doesn’t stop with a token that lost over 96% of its value.
Libra Credit eventually rebranded to Cred, and Cred Inc. is the company that would later file for #bankruptcy. 
There is a lot of controversy surrounding Cred Capital, the entity at the center of the two California civil lawsuits.
There is a lot of controversy surrounding Cred Capital, the entity at the center of the two California civil lawsuits.
A former employee allegedly transferred $2M in #Bitcoin from Cred Capital. 
https://blockchair.com/bitcoin/transaction/463362d41ab2686977f6f7c8bcb40ffbbfbf7fb9846558c602a29351f2cdbba0
from Cred Capital. https://blockchair.com/bitcoin/transaction/463362d41ab2686977f6f7c8bcb40ffbbfbf7fb9846558c602a29351f2cdbba0
Bankruptcy document #1, #Chapter11 Voluntary Petition, showed that Cred Inc. had an estimated:
5,001-10,000 creditors
$50,000,001-$100 million in assets
$100,000,001-$500 million in liabilities
#Bitcoin $ETH $BTC
5,001-10,000 creditors$50,000,001-$100 million in assets $100,000,001-$500 million in liabilities #Bitcoin
$ETH $BTC
Cred Inc. Pro-Forma Assets and Liabilities, revealed:
$136.499M in Liabilities
$67.839M in Assets
So, nearly a $69M financial hole!
$114.6M Customer crypto deposits
$20.8M in collateral for customer loans
#Bitcoin $BTC $ETH
$136.499M in Liabilities $67.839M in AssetsSo, nearly a $69M financial hole!
$114.6M Customer crypto deposits$20.8M in collateral for customer loans#Bitcoin
$BTC $ETH
However, as every good financial analyst knows, it's all about the #footnotes. 
Footnote #2 reveals:
$12.1M of the $14.7M or 82.5% of the cryptocurrency listed as assets are considered #illiquid.
$964k of the illiquid cryptocurrency consists of $LBA Token.
Footnote #2 reveals:
$12.1M of the $14.7M or 82.5% of the cryptocurrency listed as assets are considered #illiquid.$964k of the illiquid cryptocurrency consists of $LBA Token.
Footnote #3 reveals:
$320K or 65.4% of the frozen cryptocurrency consists of the illiquid $LBA Token ($226K) and Universal Protocol $UPT ($94K).
These funds were frozen by Uphold, which had a partnership with Cred that was discontinued on 10/23
https://support.uphold.com/hc/en-us/articles/360051081112-Uphold-has-discontinued-its-relationship-with-third-party-crypto-lending-provider-Cred-
$320K or 65.4% of the frozen cryptocurrency consists of the illiquid $LBA Token ($226K) and Universal Protocol $UPT ($94K). These funds were frozen by Uphold, which had a partnership with Cred that was discontinued on 10/23 https://support.uphold.com/hc/en-us/articles/360051081112-Uphold-has-discontinued-its-relationship-with-third-party-crypto-lending-provider-Cred-
Footnote #5 reveals:
Cred issued $39M in loans to moKredit, an insider owned entity.
moKredit has not paid back any of the loan principal to date and part or all of it may be uncollectible.
Cred issued $39M in loans to moKredit, an insider owned entity. moKredit has not paid back any of the loan principal to date and part or all of it may be uncollectible.
Footnote #10 reveals:
$3M in potential assets is not shown on the financials due to the pending litigation with the former employee.
Another $10M+ of stolen #Bitcoin is not included either on the financials, although there are no further details on this theft. 
$3M in potential assets is not shown on the financials due to the pending litigation with the former employee. Another $10M+ of stolen #Bitcoin is not included either on the financials, although there are no further details on this theft.
Doc #16 had a graph of #Bitcoin ’s price in USD from 3/16/20 to November 2020.
According to the declaration:
The $BTC price increase was unfavorable to Cred's financial position as they would owe more in Customer deposit liabilities.
’s price in USD from 3/16/20 to November 2020.According to the declaration:
The $BTC price increase was unfavorable to Cred's financial position as they would owe more in Customer deposit liabilities.
@jdorman81, speculated that Cred was likely writing covered calls against the illiquid cryptocurrency, which was probably used as collateral. https://twitter.com/jdorman81/status/1326170532677476352?s=20
Further, with the help of @joshua_j_lim, and bankruptcy document #11,
@jdorman81 believes that Cred was allegedly issuing free call options to employees and bearing all of the downside risks. https://twitter.com/jdorman81/status/1326237516022706176?s=20
@jdorman81 believes that Cred was allegedly issuing free call options to employees and bearing all of the downside risks. https://twitter.com/jdorman81/status/1326237516022706176?s=20
was not up to the rigorous requirements that should be in place for a market as volatile as cryptocurrency. 
