The California Department of Financial Protection and Innovation (DFPI) has announced the suspension of the license issued to crypto lender Salt Lending to operate in the state.
The DFPI said the license would be suspended for 30 days. The agency is investigating whether the lender has complied with the California Financing Act. The decision of the regulator is due to the fact that Salt Lending was forced to temporarily stop the withdrawal of client funds. The management of Salt Lending blamed the bankrupt FTX exchange, which the DFPI is also investigating, for its financial difficulties. The lender said it is working with stakeholders to resolve the issue.
“Unfortunately, the collapse of FTX affected our business. We are not yet able to determine the extent of this impact and provide specific details, therefore, the decision has been made to suspend deposits and withdrawals on the Salt platform,” said Shawn Owen, CEO of Salt Lending.
This is not the first time Salt Lending has run into trouble with regulators. In 2020, the US Securities and Exchange Commission (SEC) accused the company of selling unregistered securities during an ICO in 2017. The regulator demanded that Salt Lending return $47 million invested by investors.
California authorities are tightening their stance on the digital asset industry. In September, the DFPI began investigating 11 cryptocurrency companies, suspecting them of running pyramid schemes.
Source: Bits
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