The top U.S. financial watchdog has ordered Salt Lending to offer investors refunds for its 2017 initial coin offering (ICO).
- The Securities and Exchange Commission (SEC) 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 after the filing of a registration statement to submit a claim to Salt, which 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 (Sept. 30, 16:50 UTC): This article has been updated to specify that the SEC is ordering Salt Lending to offer investors refunds, rather than issue refunds directly.