SALT: Crypto Lender Makes a Comeback with Millions in Funding

The virtual digital asset lender held withdrawals in November and will recommence activities in Q1 this year, sustained by a Series A reinvestment. Unfortunately, the cryptocurrency winter and the collapse of FTX have tampered with the ranks of virtual digital asset lenders.

BlockFi, Celsius Network, Voyageur Digital, and Genesis filed for bankruptcy in the last seven months, and the event may still be far from over. However, SALT, one of the digital asset lenders, is on the comeback track.

One of the globe’s first virtual crypto asset lenders, SALT, was rolled out at the beginning of February. It has closed a 64.4 million dollar financing that will tighten its balance sheet and fund its investment reserves.

In addition, authorized investors will acquire the firm’s recommended stock in return for their investment. However, the Series A reinvestment attempt is still undergoing stages of approval by the authorities. Nevertheless, it should enable the firm to begin operations in the year’s first quarter.

The crypto lending company reported a freeze on holdings and credits to its lending firm in November, just after FTX collapse. Like many other firms, SALT utilized FTX as a source of income for its lending activities.

Additionally, SALT did not file for bankruptcy despite the freeze on withdrawals; the company also lost its California license, and a deal to liquidate the firm to BnKToTheFuture was ditched. The California license is still suspended, and is working closely with authorities to have it restored. Furthermore, the company is doing everything to return to investors’ good books.

A Series B Investment Round in 2023

SALT strategizes to look for further funding later this year, an expected Series B funding in the one hundred million size range to foster its capital reserves. The collapse of FTX affected the crypto lender since the company had accounts on FTX, according to Owen, who told Coin telegraph.

Traders and investors can access fiat loans using BTC and other virtual digital assets as security on the crypto lender platform; however, sometimes, users want to settle off their loans and retrieve their securities.

Although a company such as SALT has to have the ability to prove that it can liquidate securities pretty much immediately at an agreed price, Owen further explained, and to enable that, you have to have affiliations with buyers, thus the call for further funding.

Need for more Regulations

Calls have been rampant daily for the cryptocurrency industry to better its regulations. In the United States, lenders are expected to be authorized state-to-state. The major problem is not the absence of guidelines but the need for implementation.

Others trust that all the virtual digital asset lending bankruptcies have generated a market gap that traditional financial providers such as banks will currently speed to fill the vacuum. Moreover, banks are unlikely to be affiliated because recent activities have diminished their involvement. However, several banks are growing an appetite for central bank digital currency compared to crypto.

Counterparty Risks 

To begin with, it is the principle of having security to safeguard any loan. Thus most of the meltdowns experienced in the past resulted from unprotected lending. Following is the need for capital because there is no insurance for virtual digital assets, so having multiple asset reserves is very important, according to Owen and Cointelegraph.