BnkToTheFuture, an online investing platform, has agreed to acquire Salt Lending for an undisclosed sum in order to enable customers to borrow money against their cryptocurrency holdings as lenders like Celsius Network and Voyager Digital halt withdrawals and seek bankruptcy protection.
The company, which enables qualified consumers to invest in cryptocurrency businesses, security tokens, and alternative financial products like retirement plans with a bitcoin focus, said it also wants to assist distressed lending platforms and their clients. It declined to provide more details.
It maintains a 5% share in Celsius and has put out a restructuring offer. According to those with knowledge of the situation, the company reportedly had its eye on Celsius' loan book business.
After suspending customer withdrawals due to a liquidity crisis brought on by the failure of Singapore-based cryptocurrency hedge fund Three Arrows Capital, Voyager filed for protection from creditors in June.
Another lender, BlockFi, was hard hit by the sharp decline in the crypto market in June and July, cutting about a fifth of its workforce and accepting a $250 million loan from crypto exchange FTX in moves that raised questions about its financial stability.
Celsius followed suit, citing "extreme market conditions."
“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 said in a statement.
The business and the cryptocurrency exchange Bitfinex collaborated on a recovery strategy. More than 119,756 bitcoins, or $66 million at the time, were stolen from Bitfinex in 2016 after hackers were able to get past account security measures.
BnkToTheFuture is listed with the Cayman Islands Monetary Authority as an excluded securities business. One of the first players in the cryptocurrency loan market, Salt, a Denver-based startup formed in 2016, came before businesses like 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 said.
The business and the cryptocurrency exchange Bitfinex collaborated on a recovery strategy. More than 119,756 bitcoins, or $66 million at the time, were stolen from Bitfinex in 2016 after hackers were able to get past account security measures.
After working with BnkToTheFuture, Bitfinex recovered in less than a year, according to Dixon. As part of that strategy, Bitfinex's BFX tokens may be redeemed by customers who had been the victims of the attack for stock in its British Virgin Islands-based parent business, iFinex.
The deal with Salt Lending is contingent upon signing definitive agreements and obtaining regulatory approvals.