Crypto Lender SALT to make a stunning comeback with $64.4 million funding

Adeniyi Odukoya
Crypto Lender SALT to make a stunning comeback with $64.4 million funding

Crypto lender SALT is set to resume operations after freezing withdrawals at the end of last year.

Following the saga involving crypto exchange FTX, cryptocurrency lenders like Genesis, BlockFi, Voyageur Digital, and Celsius Network have filed for bankruptcy in the last seven months. Many could make a similar move in the coming days.

Nonetheless, the uplifting news has been the reemergence of some of these firms in the crypto space. SALT lending is the most recent to make a full-fledged comeback.

Recognized as one of the world’s first cryptocurrency lenders, Salt revealed yesterday that it has agreed to a $64.4 million financing to bolster its balance sheet and enhance its capital reserves.

Crypto Lender SALT to make a stunning comeback with $64.4 million funding

As reported by Cointelegraph, accredited investors will get 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 operations in the first quarter of 2023.

Read Also: Binance launches amazing feature for calculating taxes on crypto transactions

SALT lending announced a “suspension,” a pause on operations—withdrawals and deposits—in mid-November because of the misfortune accrued from FTX’s devastating upheaval. SALT used the Bahamas-based FTX as a source of liquidity for its lending operations. 

“Crypto faced a perfect winter storm in 2022, taking 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.

Though SALT Lending did not file for bankruptcy, its November suspension of withdrawals and deposits set social media agog. In addition to the woe, it got deprived of its California lending license, and a deal to sell the company to BnkToTheFuture did not go through.

Crypto Lender SALT to make a stunning comeback with $64.4 million funding

The California license has not been resuscitated, though Owen told Cointelegraph in an interview that it’s working with the state’s regulators to restore it. “We’re staying as transparent as we can, and we’re educating them on all the details of exactly how the business model works.”

Shawn Owen still can’t say 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.”

More details on SALT’s comeback

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

FTX’s collapse affected SALT’s business. “We had accounts on FTX,” said Owen. He was stunned when the Bahamas-based exchange suddenly collapsed. “We felt up until 48 hours before [it crashed] that FTX was another platform that had good liquidity and a good interface and was one of ours.”

On SALT’s platform, people and companies can get fiat loans using Bitcoin and other cryptocurrencies as collateral. Still, occasionally borrowers wish to pay off their loans and want their collateral back.

Thus, a lender like SALT has to prove that it “can sell collateral pretty much instantaneously at a certain price,” he further explained. “And in order to do that, you have to have relationships with buyers — or you have to be the buyer.” Hence the need for further capital.

Read Also: Crypto banking firm Juno resumes operations after securing new partnership


Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!

Register for Technext Coinference 2023, the Largest blockchain and DeFi Gathering in Africa.

Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!