Salt Lending, one of the world’s first cryptocurrency lenders, has closed a $64.4 million financing round that will strengthen its balance sheet and replenish its capital reserves.
It has been reported that 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.
However, the 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.
Shawn Owen, the founder and interim CEO of Salt, said:
“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.”
The report said that 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 Bnk To The Future was jettisoned.
Thus, a lender like Salt has to be able to prove that it “can sell collateral pretty much instantaneously at a certain price.”