A federal judge on Friday handed prison terms totaling nearly eight years to two former executives at failed crypto lender Cred, whose actions fueled one of crypto’s worst investor losses.

Legal experts told Decrypt that the sentences establish new precedents for executive accountability in crypto fraud cases.

Daniel Schatt, former CEO and co-founder of Cred LLC, received 52 months in federal prison, while the firm’s Chief Financial Officer Joseph Podulka was sentenced to 36 months.

Senior U.S. District Judge William Alsup handed down the sentences after both men pleaded guilty in May to wire fraud conspiracy charges.

The executives misled customers about Cred’s financial health while secretly funneling 80% of customer assets into high-risk microloans to Chinese gamers through an affiliated company.

When the scheme collapsed during 2020’s crypto market crash, more than 440,000 customers los

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Author: Vismaya V