Cryptocurrency bankruptcy lending platform Cred Inc. is believed to have inadvertently appointed a refugee inmate as CFO.
A report submitted by Sgt. Robert Stark of Brown Rudnick LLP on March 8 alleges that British authorities recognized former CFO James Alexander as an economic refugee, and he was sentenced to more than three years in prison in December 2007. Stark said:
“There was a security break in this institution while I was imprisoned. The British government identified Alexander as a refugee.”
In December, Judge John Dorsey appointed Stark to investigate claims by Cred clients that the company had lost $ 66 million in less than two years due to fraud and incompetence.
The report found that the accounting and compliance practices at Creds were “haphazard, chaotic, and in some cases not at all”, given the lack of standardized reporting, tracking, and apparent clarity for future clients and company funds.
“When Cred filed for bankruptcy, they hadn’t made a blanket financial settlement for nearly a year,” he said, adding:
“Cred appears to have met its marketing goals, but abandoning core business functions was a sign of eventual death.”
Alexander has been at the center of the Cred bankruptcy proceedings since it was filed in November, and the firm’s lawyers accused him of seeking to acquire the subsidiary Cred Capital. They accuse Alexander of transferring the company’s $ 4.3 million cryptocurrency to accounts under his control and fraudulently, and of losing another $ 11.5 million in digital assets.
The defendant filed a lawsuit rejecting Cred Capital’s bankruptcy proceedings, claiming to be its director and the only person who could delegate the archive. The payout was dismissed earlier this month.
Last month, Alexander’s attorneys withdrew from the case, saying the defendant did not have the crypto assets they had repeatedly requested to turn over to the authorities.