Crypto Lending Firm SALT Halts Withdrawal Post FTX Crisis

Grayscale Declines Providing Proof-of-Reserve Citing Security Concerns
  • SALT said it would honor on-chain deposits in a letter to consumers.
  • The firm suspended withdrawals until further notice.

Following the FTX led effect through the cryptocurrency ecosystem, crypto lending company SALT announced today that it is suspending withdrawals.

SALT CEO Shawn Owen stated:

“The collapse of FTX has impacted our business. Until we are able to determine the extent of this impact with specific details that we feel confident are factually accurate, we have paused deposits and withdrawals on the SALT platform effective immediately.”

Domino Effect Started

Launched in the first few months of 2018, SALT Lending is a service that facilitates loans secured by cryptocurrency. To put it another way, consumers may get a loan without having to liquidate their cryptocurrency.

The Securities and Exchange Commission (SEC) filed charges against SALT Lending for issuing an unregistered security in September 2020, and the company was subsequently compelled to refund the $47 million it had received in an initial coin offering (ICO).

Owen said that the company intends to be as open and honest as possible as it works with its partners to ensure a clear route ahead. SALT said it would honor on-chain deposits in a letter to consumers, but warned them not to add any additional money to their accounts until the company provided more information about its future intentions. It is unclear how much exposure the lending platform has to FTX.

Owens said last month in an interview with Crowdfund Insider:

“In both secured and unsecured lending, transparency is paramount. Owens told Crowdfund Insider last month. Without a clear idea of assets and liabilities, borrowers and lenders alike can’t properly assess counterparty risk, which is a major decision driver for deploying capital into money markets.”

Recommended For You:

BlockFi Reportedly Planning to File Bankruptcy Post FTX Fall

Content writer by profession. A crypto lover and has passion for writing. Follows the developments of digital currency right from its launch, years ago.