- SEC is investigating Salt Lending Ltd.
- This is in connection with their 2017 $50 million token sale
- The firm previously had Eric Voorhees listed as a director
According to the 15th November 2018 report, the Securities and Exchange (SEC) has opened an investigation against Salt Lending Holdings Inc.
The firm is notable due to its association with Eric Voorhees, a notable figure in the blockchain industry.
The investigation is due to a $50 million dollar token sale which they held in 2017.
The firm is also facing a lawsuit in Colorado from a former financial advisor who claims that the firm gave advantageous loans to insiders and lost about $4 million in cryptocurrency earlier this year.
The SEC is investigating whether Salt’s token sale should have been registered and how proceeds from the sale were used.
The Trouble with Voorhees
One of the things that makes this case particularly interesting is the involvement of Eric Voorhees in the firm.
As of the time of the token sale, he was listed as a director for the firm on its website. He is also well known as the CEO of ShapeShift, a cryptocurrency exchange.
When firm received its subpoena in February 2018, it backtracked on Voorhees’ role there. Despite that fact that he had been listed as a director and used in promotional materials, the firm then claimed that he was an early contributor but “no longer serves in any formal capacity.”
This is also not the first time that he is being investigated by the SEC.
A few years ago, he was fined by the SEC for running unregistered public offerings of securities and is essentially banned from raising funds through private markets.
“A provision in the  settlement makes him a so-called ‘bad actor’ unable to rely on an SEC safe harbor for private, unregulated stock sales.” said Keith Higgins, chairman of the securities and governance practice at Ropes & Gray LLP.
Voorhees also faced controversy a few years ago when his name appeared in the Panama papers leak which exposed the use of offshore havens for tax evasion and other financial crimes.
It was revealed that he had been involved with Charlie Shrem, a businessman who had been convicted and imprisoned for aiding and abetting the operations of an unlicensed funds transmission business that was linked to Silk Road in Lewisburg, PA.