New York AG fines Uphold $5M over crypto yield marketing

The New York attorney general’s office reached a $5 million settlement with crypto platform Uphold resolving allegations that the company promoted a yield product without providing adequate disclosures to New York consumers. The office described the action as the state’s first enforcement targeting a promoter of a crypto yield offering.

The agreement requires Uphold to pay $5 million and to change how it markets and presents yield-related offers to customers in New York. The attorney general’s office said the settlement also includes financial remediation and compliance measures intended to limit future promotions the office determined lacked sufficient transparency.

The office opened the matter after reviewing marketing materials and customer disclosures tied to the product. Investigators concluded certain statements could have given New Yorkers a misleading impression of the risks and safeguards tied to earning yields on digital assets. The enforcement focuses on the company’s role in publicizing and facilitating the product rather than on individual consumer trades.

Uphold offers trading and custodial services for retail and institutional clients and has expanded features that let customers earn returns by allowing assets to be used in lending or other income-generating arrangements. Regulators have examined such programs because they mix elements of lending, brokerage and investment products and may raise questions about registration, required disclosures and custody practices.

State and federal regulators have increased scrutiny of firms and products in the crypto lending and yield space over concerns that consumers were not given clear information about liquidity, counterparty risk and how yields were generated. Analysts said the New York action targets the companies that market and present these products to retail investors, in addition to platforms that operate the underlying programs.

Crypto yield products let users earn periodic returns by permitting tokens or stablecoins to be used in lending or other arrangements. Regulators have flagged some of these setups for possible classification as investment contracts or securities, which would trigger registration and disclosure obligations. The settlement is the first public example in New York of enforcement aimed at a promoter rather than solely at operators of lending pools or protocols.

The attorney general’s office said the settlement will be posted publicly and that details of the compliance obligations will be available to inform businesses and consumers. Uphold issued a brief statement acknowledging the settlement and saying it will comply with the agreement while aligning its practices with regulatory expectations.