Conducted $50 Million ICO Puts Crypto Lender SALT in Trouble with the U.S. SEC

A crypto loan provider, SALT Lending, has rocked the waters with the U.S. Securities and Exchange Commission (SEC). This is primarily because of its token sale which raised a whopping $50 million with support from Erik Voorhees, an American startup founder and co-founder of the bitcoin company: Coinapult.

SEC Sent Out Subpoenas to Several Crypto Startups- SALT Lending

According to the Wall Street Journal report, the U.S. SEC sent a subpoena to SALT Lending earlier this year in February. The subpoena was sent to gather data about its very successful ICO last year which raised about $50 million at a period when the crypto market was generally booming alongside token sales having tons of cash pouring in for their Initial Coin Offering. At this time, everyone was hit with the FOMO (Fear of Missing Out) after Bitcoin suddenly made millionaires of people around the world.
Unnamed sources cited in the report said that the SEC was trying to determine if the SALT ICO constituted an unregistered securities offering, as well as how the funds raised were used, and also how the tokens were distributed to the ICO’s investors.
Securities and exchange commission
SALT Lending verified that it had indeed been subpoenaed to the Wall Street Journal and further stated that the subpoena came at a time that the SEC was quizzing several other blockchain based startups in a bid to determine who had raised funds through ICOs that the agency believes may have been illegal securities offerings.
The report from the Wall Street Journal also indicated that a former financial officer of SALT had filed a lawsuit against the FinTech Company. He claims that a loss $4 million worth of crypto was incurred by the blockchain based firm after a hack in February, and also gave favorable loan terms to company executives and their family members.

SALT’s Connection with Erik Vorhees

The WSJ also stated that the SEC had started investigations into whether Erik Vorhees, a man disbarred from participating in any issuance of any security in an unregistered transaction in exchange for any virtual currency including Bitcoin for a period of five years, violated the 2014 SEC settlement.
The settlement was partly as a result of charges related to his Bitcoin gambling site, SatoshiDICE. He was charged with conducting an unregistered securities offering after allowing investors to use bitcoins to purchase shares in SatoshiDICE and another company.
Another Vorhees project, ShapeShift, which previously helped users trade without accounts or identity verification suddenly started forcing its users to submit to KYC (Know Your Customer) policies and verify their accounts. It is suspected that the company was forced to do so under the pressure of financial regulators. Concerning the matter, he tweeted to a dissatisfied follower who asked why KYC was being forced on users.

“What I write is being watched very closely. Please give us time.”

SALT executive Jennifer Nealson told the WSJ that Vorhees was an “early contributor” to the firm but “no longer serves in any formal capacity.” He was, however, listed as a co-inventor in the SALT patent application filed on January 30. Questions about why Vorhees departed SALT Lending was left unanswered by the SALT spokesperson.
The subpoena hasn’t led SALT to halt operations or imminent expansion, as the firm has continued to open its services to new jurisdictions and add more cryptocurrency collateral options to its platform in the months following the start of the SEC’s investigation.
Erik Vorhees made a series of tweets a couple of days ago comparing the age of the Euro to Bitcoin (BTC), talking about the debasement of both currencies and asking followers to make predictions on which would last longer in the nearest future.

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