Cryptocurrency investment platform Cred Inc. unwittingly put a convicted financial criminal identified by the U.K. as a fugitive in charge of raising and deploying the firm’s capital before its collapse into bankruptcy, a court-appointed examiner said, the Wall Street Journal reported. An examiner’s report filed Monday in the U.S. Bankruptcy Court in Wilmington, Del., said that Cred failed to keep reliable records, properly track customer funds, perform due diligence on the firm’s investments or uncover the “extremely worrisome past” of former Chief Capital Officer James Alexander, who was fired last June. The firm’s collapse into bankruptcy was largely due to a “dereliction in corporate responsibility,” examiner Robert Stark said in his 99-page report. Failures included “chaotic and, in some instances, nonexistent diligence, accounting and compliance functions,” according to the report. Cred in bankruptcy filings has blamed Mr. Alexander for some of its financial troubles, accusing him of making off with bitcoin valued at millions of dollars.
