The Securities and Exchange Commission is investigating cryptocurrency lending company Salt Lending and Erik Voorhees, a high-profile crypto entrepreneur who used to sit on the company’s board, The Wall Street Journal has reported.
Salt, which uses bitcoin (BTC), ether (ETH), litecoin (LTC) and dogecoin (DOGE) as collateral to make loans in fiat currency, received a subpoena in February related to the company’s $50 million initial coin offering in 2017, the article said, citing people familiar with the probe.
The investigation reportedly centers around whether the ICO was a securities offering that the company should have registered with the SEC. It also looks at the company’s distribution of tokens to company “insiders” and how Salt Lending used sale proceeds.
The probe also reportedly is looking at whether Voorhees, who is CEO of the crypto exchange ShapeShift, raised money for Salt Lending in violation of a previous settlement agreement with the SEC.
In 2014, he settled with the agency on charges he publicly offered shares in two cryptocurrency ventures without registering them.
He agreed to pay back more than $15,000 he’d earned in profits after selling shares in SatoshiDICE and FeedZeBirds to investors, plus a $35,000 penalty. The settlement also prohibited Voorhees from making bitcoin security offerings for five years.
In a blog post, Voorhees disputed the Journal’s article, writing that he had “abided by the terms of my SEC settlement” and that the paper had “not dealt with me or my company ShapeShift in good faith.”
In September, the newspaper reported that criminals were using ShapeShift to launder money. Voorhees called that story “factually incorrect and deceptive.”