theblockcrypto.com/genesis/85329/…
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. 🖥️
blockchair.com/bitcoin/transa…
blockchair.com/bitcoin/transa…
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 Assets
So, 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
support.uphold.com/hc/en-us/artic…
▶️$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
support.uphold.com/hc/en-us/artic…
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.
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.
@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
Overall, it appears that Cred’s risk management 🛑 was not up to the rigorous requirements that should be in place for a market as volatile as cryptocurrency. 📈📉🎢
The details are still fuzzy, and only time can provide clarity as more details become public.⏲️
#Bitcoin $BTC
The details are still fuzzy, and only time can provide clarity as more details become public.⏲️
#Bitcoin $BTC
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