![](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-01\/7aa1a33f-59df-43b6-a48f-720470f0fb56.jpg\")
<\/p>\nCrypto exchange Uphold has denied owing around $784 million to the liquidation trust of bankrupt crypto investment platform Cred.<\/p>\n
At a court hearing on Jan. 11, Uphold filed a motion to dismiss all counts in the suit served against the firm by Cred in June 2022.<\/p>\n
Cred was a crypto lending service that filed chapter 11 bankruptcy in November 2020. In June 2022, Cred\u2019s liquidation trust filed an adversary\u00a0complaint against Uphold and two affiliates. <\/p>\n
It claimed that Uphold worked with Cred co-founders to promote CredEarn and claimed that it owes the crypto lender $783.9 million.<\/p>\n
According to the lawsuit, Cred claimed that Uphold worked with Cred’s co-founders to promote CredEarn, claiming that crypto investments\u00a0channeled from Uphold at the time of the market peak would have been worth upwards of $700 million. <\/p>\n
The product promised high yields which lured in retail investors, however, Cred\u2019s investments turned sour leading to customer losses and a bankruptcy filing in November 2020. Cred\u2019s bankruptcy case has similarities to those of Celsius Network and Voyager Digital.<\/p>\n
Furthermore, it alleged that Uphold \u201caided and abetted alleged breaches of fiduciary duties by Cred co-founders Daniel Schatt and Lu Hua and other key Cred officers in connection with the CredEarn program,\u201d according to Law360.<\/p>\n
The suit also alleged that Uphold was aware that Cred was \u201cimplementing a highly risky hedging strategy and that there was regulatory risk associated with cryptocurrency yield earning programs.\u201d<\/p>\n
However, in its motion to dismiss the case, Uphold called Cred trust\u2019s allegations against it \u201cincoherent, conclusory, and conspiratorial,\u201d urging the Delaware bankruptcy court to reject them.<\/p>\n
Uphold\u2019s attorney, Zachary Taylor of Baker & Hostetler, told the court \u201cunsupported speculation is all the trust has,\u201d before adding \u201cit makes no sense.\u201d<\/p>\n
<\/p>\n
Uphold denied the allegations it was aware of the risks at Cred, claiming Cred was owned and operated entirely independently. It also claimed that it was unaware of CredEarn\u2019s financial troubles when it promoted the product to Uphold customers.<\/p>\n
The motion also argued that it had nothing to do with Cred’s insolvency. <\/p>\n
CredEarn \u201cwas owned, managed, and operated independently by Cred, and it was internal fraud and mismanagement that caused Cred’s downfall,\u201d it read.<\/p>\n