California Regulator Suspend Salt Crypto Lender License For 30 Days. The California Department of Financial Protection and Innovation (DFPI) said it would suspend Salt’s license for 30 days.
The suspension comes as regulators investigate the crypto lender’s decision this week to stop client withdrawals. This was disclosed by the DFPI on Wednesday.
Quoting Coindesk, Thursday (17/11/2022), on Tuesday, November 15, 2022, Salt announced it would stop customer withdrawals and deposits due to the impact of the collapse of the FTX crypto exchange.
Then, on Tuesday, online investment platform Bnk To The Future said it had discontinued its previously announced non-binding waiver to acquire Salt due to the latest FTX exposure.
The DFPI took similar action to suspend the crypto lender’s BlockFi license last week as it also halted withdrawals due to the FTX collapse. The department said it was also separately investing in FTX.
Earlier, crypto lending platform SALT said it was stopping withdrawals. SALT being the company that stopped withdrawals was affected by the collapse of crypto exchange FTX.
“The collapse of FTX has an impact on our business,” SALT CEO Shawn Owen said in a message sent to consumers, quoted from Decrypt, Wednesday (16/11/2022).
The announcement continues, SALT will determine the extent of this impact with specific factually accurate details. Therefore, the company has temporarily suspended deposits and withdrawals on the SALT platform.
SALT Lending was launched in early 2018, allowing cryptocurrency owners to take out loans using their crypto as collateral. That way, users can receive cash loans without selling their crypto holdings.
In September 2020, SALT Lending was charged by the Securities and Exchange Commission for selling unregistered securities and was ordered to pay back the USD 47 million (Rp 731.8 billion) it raised in an Initial Coin Offering (ICO) in 2017.
Owen said the company is working diligently with its partners to secure a clear path forward and plans to be as transparent as possible.
“Without a clear idea of assets and liabilities, borrowers and lenders alike are unable to properly assess counterparty risk, which is a key decision driver for deploying capital in financial markets,” said Owen.
California Regulator Suspend Salt Crypto Lender License For 30 Days. In its letter to customers, SALT said it would use on-chain deposits but strongly advised against depositing more funds into customer accounts until the company can convince them of its future plans.
Previously, the crypto company founded by Sam Bankman-Fried, had moved USD 2.7 million worth of Serum, FTX and Uniswap tokens (Rp 4.2 billion) to a new wallet address.
In total, they have accumulated assets worth USD 89 million (IDR 1.3 trillion), according to on-chain data.
Reporting from Decrypt, Tuesday (15/11/2022), blockchain analytics company Nansen said there were no wallet names on the new address, all of which were labeled as belonging to Sam Bankman-Fried’s crypto trading company, Alameda Research. Nansen also explained that the company had been trying to move funds since yesterday.
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The transaction is just the latest unexplained transfer by wallets belonging to Alameda Research following the FTXGroup’s Chapter 11 bankruptcy filing, which includes FTX.com, West Realm Shires (FTX’s US parent company), and Alameda Research.
On Saturday, Alameda Research transferred USD 36 million worth of funds to USD 31 million worth of BitDAO tokens (BIT), USD 5 million worth of SushiBar tokens, and USD 1 million worth of Render tokens.
Alameda purchased 100 million BIT tokens last year from BitDAO, a decentralized autonomous organization founded last year by Singapore-based exchange Bybit and backed by Peter Thiel, Founders Fund that Thiel founded, Pantera Capital, and Dragonfly Capital.
Alameda used FTT Coin to purchase BIT tokens and, as part of their deal, the organization agreed neither would sell any other tokens before November 2024.
Earlier this month, BitDAO demanded that Alameda prove they were not liquidating tokens after BIT suddenly dropped 20 percent. Now, 100 million BIT tokens appear to be in wallets where Alameda is transferring funds from other wallets.
Read Also: The Reason Why Southeast Asia Leads Global Crypto Adoption
California Regulator Suspend Salt Crypto Lender License For 30 Days. Alameda, founded in 2017 by Bankman-Fried and Tara Mac Aulay, is a quantitative trading company and a sister company to FTX. Bankman-Fried founded FTX in 2019 but did not step back from his day job at Alameda Research until July 2021.
When he did, Caroline Ellison and Sam Trabucco were named co-CEOs. Trabucco stepped down in August, saying on Twitter he could not “personally continue to justify the investment of time in being a central part of Alameda.”
