Crypto Updates

Crypto lender SALT makes comeback with $64.4 million funding

Crypto lender SALT makes comeback with $64.4 million funding

The crypto winter and FTX collapse has decimated the ranks of cryptocurrency lenders. Genesis, BlockFi, Voyageur Digital and Celsius Network all filed for bankruptcy in the past seven months, and the contagion may still not be over. But at least one crypto lender appears to be on the comeback trail. 

SALT Lending, one of the world’s first cryptocurrency lenders, announced Feb. 8 that it has closed a $64.4 million financing that will strengthen its balance sheet and replenish its capital reserves. Accredited investors will receive shares of the company’s preferred stock in return for their funding. Though the Series A recapitalization effort is still subject to approval by regulatory authorities, it should allow the company to return to full operation in the first quarter.

As reported, Denver-based SALT Lending announced a “pause,” i.e. a freeze, on withdrawals and deposits to its lending platform in mid November, shortly after the FTX crash. Like some other crypto firms, SALT had used the Bahamas-based FTX as a source of liquidity for its lending operations.

“Crypto faced a perfect winter storm in 2022, taking with it significant industry participants like Terraform Labs, Voyager Digital, Celsius Network, Three Arrows Capital, FTX, and BlockFi. SALT was not immune to these market forces, but we are determined to emerge stronger than ever,” Shawn Owen, founder and interim CEO of SALT, said in an announcement today.

While SALT Lending never filed for bankruptcy, its November freeze on withdrawals set off a mini tempest on social media. The firm also lost its California lending license, and a deal to sell the company to BnkToTheFuture was jettisoned.

The California license remains suspended, though Owen told Cointelegraph in an interview that it’s working with the state’s regulators to get it restored. “We’re staying as transparent as we can, and we’re educating them on all the details of exactly how the business model works.” But Owen still can’t say at this point if and when the license will be restored. “You can’t guarantee anything because they do have discretion. But we’re doing everything we can to be good actors.”

A Series B funding round in 2023

SALT plans to seek further funding later in 2023 — an anticipated Series B financing in the $100 million size range — to further build out its capital buffer, Owen told Cointelegraph.

FTX’s collapse clearly impacted SALT’s business. “We had accounts on FTX,” said Owen….

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