Summary
The NY AG's Assurance of Discontinuance (April 29, 2026) requires Uphold to: (1) pay $5M to harmed investors (more than 5x fees earned from CredEarn), (2) register as a broker with the OAG under the Martin Act, (3) institute a risk-based due diligence process for vetting partners before recommending products, and (4) contribute any Cred bankruptcy recoveries (~$545K claim) to the victim fund. This is the first NY enforcement action targeting a platform that promoted someone else's yield product rather than the issuer itself — setting a precedent for any platform co-marketing a partner's investment product to NY customers.
Key Points
- $5M to harmed investors; any Cred bankruptcy distribution added to victim fund
- Must register as broker and commodity broker-dealer with NY OAG
- Due diligence requirements: corporate docs, insurance, org charts, regulatory filings, conflicts, audited financials, compliance/risk policies, security/technology
- Must interview independent third parties (accountants, auditors, experts, competitors) to verify partner claims
- 6,000+ customers invested ~$50M; losses exceeded $34M when Cred collapsed Nov 2020
- Cred CEO Daniel Schatt sentenced to 52 months (federal); CFO Podulka to 36 months
- Precedent: first NY action against a promoter of a third-party yield product, not the issuer
- Uphold currently does not serve NY customers; has filed BitLicense application with NYDFS