Cred platform: white-collar criminal and prison escapee hired as finance chief
Insolvent cryptocurrency lending platform Cred Inc is said to have unwittingly appointed an escaped prison inmate as its chief financial officer.
Examiner Robert Stark of Brown Rudnick LLP filed a report on 8 March alleging that former Cred CFO James Alexander was identified by UK authorities as a financial fugitive. He was reportedly One Bitcoin a Day sentenced to more than three years in prison in December 2007. Stark commented:
„At the time of his incarceration, there was a prison break at this facility. Mr Alexander was recognised as a fugitive by the British government.“
Stark was selected by Judge John Dorsey in December to investigate allegations by Cred clients. It said the firm allegedly lost $66 million in less than two years through fraud and incompetence.
The report said Cred’s accounting and compliance practices were „unsystematic, chaotic and in some cases non-existent“. It found a lack of standardised reporting and tracking processes and a blatant commingling of client and company funds.
„Up to the time Cred filed for insolvency, it had not conducted a comprehensive financial reconciliation of accounts for almost a year,“ he said. He added:
„Cred appears to have more than met its marketing objectives. But the most basic business functions were missed, leading to its ultimate demise.“
Alexander has been at the centre of Cred’s insolvency proceedings since they were filed in November
The company’s lawyers accuse him of trying to take over its subsidiary Cred Capital. Alexander allegedly transferred US$4.3 million of the firm’s cryptocurrency to accounts under his control. He allegedly lost a further US$11.5 million in digital assets through fraud.
The defendant moved to dismiss Cred Capital’s bankruptcy petition, claiming he was the company’s director and the only person who could authorise the petition. The motion was dismissed earlier this month.
Last month, Alexander’s lawyers withdrew the case, claiming the defendant was improperly holding crypto assets that he was repeatedly ordered to hand over to the authorities.