Online investing platform BnkToTheFuture has agreed to buy Salt Lending for an undisclosed amount to give users the ability to borrow against their crypto holdings just as lenders such as Celsius Network and Voyager Digital freeze withdrawals and seek protection from bankruptcy.
The firm, which allows qualifying clients to invest in crypto companies, security tokens and alternative financial products such as bitcoin-centered retirement plans, said it also plans to help distressed lending platforms and their customers. It declined to be more specific.
It has proposed a restructuring bid for Celsius, in which it holds a 5% stake. The firm was said to have been eyeing the loan book business of Celsius, according to people familiar with the matter.
Voyager filed for protection from creditors in June after pausing customer withdrawals as it faced a liquidity crisis triggered by the collapse of Singapore-based crypto hedge fund Three Arrows Capital. Celsius followed suit, citing “extreme market conditions.” Another lender, BlockFi, was hit hard by the sharp downturn in the crypto market in June and July, trimming roughly a fifth of its workforce and accepting a $250 million loan from crypto exchange FTX in moves that sparked concerns about its financial health.
“We want to offer an option for distressed lending companies that may not be able to come out of bankruptcy due to regulatory issues,” BnkToTheFuture CEO Simon Dixon told CoinDesk in a statement.
BnkToTheFuture is registered as an excluded securities business with the Cayman Islands Monetary Authority. Salt, founded in 2016 and based in Denver, was one of the first entrants to the crypto lending arena, predating companies such Celsius and BlockFi.
"By combining a registered securities business with a registered lending business, we believe we are able to offer a regulatory-compliant lending and yield platform to users," a company representative told CoinDesk.
The company worked with crypto exchange Bitfinex on a recovery plan. In 2016, Bitfinex was hacked for more than119,756 bitcoins, or $66 million at the time, in 2016, after attackers managed to bypass account security controls.
Bitfinex recovered in less than a year after working with BnkToTheFuture, Dixon said. That plan involved enabling the redemption of Bitfinex’s BFX tokens for equity in iFinex, its British Virgin Islands-based parent company, to customers affected by the hack.
The deal with Salt Lending is contingent upon signing definitive agreements and obtaining regulatory approvals.
UPDATE (Sept. 2, 15:45): Changes lead photo.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.