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Two former executives of the now-defunct crypto lender Cred have been sentenced to prison by a US federal court for their involvement in a scheme of fraud that resulted in investors' loss of millions of dollars.
Cred co-founder and former CEO Daniel Schatt was sentenced to 52 months, and former Chief Financial Officer Joseph Podulka was sentenced to 36 months. The sentences came after they pleaded guilty to the conspiracy they committed in May 2025.
According to court records, the executives lied about Cred's financial status and instructed more than 80% of the customer assets to be invested in risky microloans. A related company gave these loans to online gamers in China. The plan collapsed during the 2020 crypto market crash, and the customers lost $140 million, which is now worth over a billion dollars at current prices.
Senior US District Judge William Alsup administered the sentences to the former CEO and CFO. According to legal experts, this indicates a growing focus on accountability among crypto industry executives. The 16-month difference between Schatt's and Podulka's sentences demonstrates how the courts consider leadership positions and responsibility levels when determining the outcomes.
Ishita Sharma, the Fathom Legal managing partner, explained that the amount of loss, contribution to the crime, and acceptance of guilt are some of the factors that the courts have adopted. The increased time of the sentence is because Schatt was senior and directly involved in dealing with the public messaging of the company when it was going through a financial crisis.
The executives lied to investors until March 2020, when Schatt informed customers that the platform was performing normally. The company subsequently experienced additional losses, such as a 9-million-dollar scam and an internal theft of 255 BTC by the company's Chief Capital Officer.
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According to legal analysts, the case indicates stricter enforcement criteria in crypto fraud cases. Sharma observed that reputational harm to the broader crypto industry has become a factor that courts consider when passing sentences. She pointed out that organizations in unpredictable regulatory environments ought to report risks freely.
The judge also fined each defendant $25,000 and placed them on three years of post-prison supervised release. The hearing on restitution will be held on October 7, and both defendants are expected to report to start serving their sentences on October 28.
