New York Attorney General Letitia James has secured more than $5 million from cryptocurrency platform Uphold over its role in promoting a fraudulent investment product.The settlement centers around Uphold’s promotion of CredEarn, a product offered by Cred, LLC and its CEO Daniel Schatt. Between January 2019 and October 2020, the platform marketed CredEarn to users on its platform and mobile app as a safe, reliable savings product with attractive annual interest payments.However, Uphold didn’t tell customers that Cred was generating those returns by making microloans to low-income video game players in China, who are typically borrowers with no credit histories and no access to traditional financial institutions, the Attorney General’s office said in an announcement.  Source: NY AG JamesUphold also told customers that Cred carried “comprehensive insurance,” a claim the Attorney General’s office found to be false. No such insurance protecting retail investors from digital asset losses existed in the industry at the time. On top of the misleading promotion, Uphold was operating without the required broker or commodity broker-dealer registration.Related: Canada Proposes Crypto ATM Ban to Tackle Scams, Money LaunderingCred collapse hits Uphold usersCred began racking up losses from its risky lending practices in March 2020 and filed for bankruptcy eight months later, leaving thousands of Uphold customers around the world holding the bag, according to the announcement.Under the settlement, Uphold will pay $5 million directly to affected customers, more than five times the fees it collected from the arrangement. Any funds Uphold recovers from Cred’s ongoing bankruptcy proceedings, where it is owed $545,189, will also be passed on to harmed investors. Affected users will be notified by email when the funds hit their accounts.“Investors should be able to trust the industry advice they receive,” James said, “and my office will always work to ensure bad actors are held accountable for endangering their customers’ financial security.”Related: US Gov’t Sues Four States, RWAs Cross $30 billionNew York’s legal run-up with CFTCLast month, New York sued Coinbase and Gemini, claiming their prediction market offerings violated state gambling laws.The CFTC fired back by suing New York in federal court, arguing that federal law gives it sole authority over prediction markets and asking for a permanent injunction to block the state’s enforcement actions.Magazine: AI-driven hacks could kill DeFi — unless projects act nowCointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

The US crypto industry’s momentum won’t be derailed in the long term even if the much-anticipated CLARITY Act, aimed at bringing more regulatory clarity to the crypto industry, doesn’t make it through Congress, according to 250 Digital Asset Management CEO Chris Perkins.“If not, we’re going to be just fine,” Perkins said on Cointelegraph’s Chain Reaction podcast on Friday, emphasizing that the two major financial regulators are already building workable frameworks.Perkins pointed to ongoing efforts by US Securities and Exchange Commission (SEC) Chair Paul Atkins and Commodities and Futures Trading Commission (CFTC) Chair Michael Selig, following the agencies’ joint interpretation released in March on how federal securities laws apply to crypto assets.Being labeled a security was once a “death sentence” for crypto “These guys are creating policy and precedent every single day, and they are giving us the one thing we’ve needed for a very long time, that certainty, that stability, and ultimately, a taxonomy,” Perkins said.“In the past, being a security was a death sentence; there was nowhere to go with it, and it just didn’t reconcile…now it is awesome to be a security,” he said. During the Joe Biden administration, under former SEC chair Gary Gensler, crypto tokens classified as securities typically faced enforcement action, delistings from major platforms, and had no clear pathway for compliance in the US market.Chris Perkins spoke to Cointelegraph journalist Ciaran Lyons on Chain Reaction on Friday. Source: CointelegraphWhile Perkins said he’s not worried about the industry’s long-term outlook if the CLARITY Act doesn’t pass, he added that if it does become law, it would make it much harder for future administrations to roll back the regulatory clarity.“What you’ve done is you’ve essentially enshrined policy for a very long time, as hard as it is to pass a law, it is even harder to unwind a law,” Perkins said. “There is a reason why we say it takes an act of Congress to do something,” he added.CLARITY Act hopes riseMany industry participants have raised expectations that the CLARITY Act could pass soon after the publication of new stablecoin yield provisions on Friday.Related: Riot posts $167M in Q1 revenue as data center arm pulls in $33M in first quarter“It’s time to get CLARITY done,” Coinbase chief legal officer Faryar Shirzad said in an X post on Friday, after US Senator Thom Tillis and US Senator Angela Alsobrooks published the final text aimed at settling the stablecoin yield dispute between the banking and crypto industries.US Senator Bernie Moreno recently said that he anticipates the CLARITY Act to “get done” by the end of May. On April 11, US Senator Cynthia Lummis said, “It’s now or never.”Magazine: AI-driven hacks could kill DeFi — unless projects act nowCointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.