SEC Orders Salt Lending to Offer Refunds to Investors in Its $47M ICO

Sep 30, 2020 at 14:42 UTCUpdated Sep 30, 2020 at 16:51 UTC.The top U.S. financial watchdog has ordered Salt Lending to offer investors refunds for its 2017 initial coin offering.

The Securities and Exchange Commission told Salt Blockchain Inc., the owner of the lending platform that offers dollar-denominated loans collateralized by cryptocurrencies, that it would have to begin the process of offering refunds to investors.

It will have 14 days to issue a press release, announcing the order, on its website.

In a public letter, the SEC said Salt's ICO violated securities regulations by not registering the sale beforehand.

The SEC said the token counted as a security because Salt told investors they could expect to make a return on their investment.

Investors will have three months to submit a claim to Salt, who will be obligated to pay back their investment along with any agreed interest.

Salt has agreed to settle the action and will pay a $250,000 civil penalty to the Commission in the next 10 days.

The lending platform has also agreed to register its SALT tokens - currently trading at $0.05 - as securities with the SEC.The settlement means Salt will not have to agree or deny the Commission's findings.

EDIT: This article has been updated to specify that the SEC is ordering Salt Lending to offer investors refunds, rather than issue refunds directly.