ADMINISTRATIVE PROCEEDING
File No. 3-20106

September 30, 2020 - The Securities and Exchange Commission today announced settled charges against Salt Blockchain Inc. for conducting an unregistered initial coin offering (ICO) of digital tokens. Salt has agreed to settle the action by returning the proceeds from the offering to harmed investors, registering the tokens as securities, and paying a civil penalty.

According to the SEC's order, from June 2017 to December 2017, Denver-based Salt raised approximately $47 million through the ICO to develop its business of offering loans backed by blockchain assets. The order finds that Salt told investors that it would take various steps to increase the price of the tokens, and that those tokens could be sold at a profit on a secondary market. The order also finds that the tokens were therefore offered and sold as investment contracts, yet Salt did not register its ICO pursuant to the federal securities laws, nor did the offering qualify for an exemption from the registration requirements.

The order finds that Salt violated the registration provisions of Sections 5(a) and (c) of the Securities Act of 1933. Without admitting or denying the SEC's findings, Salt agrees to cease and desist from committing or causing any violations of the charged provisions, to engage in a claims process to return funds to investors who purchased tokens, and to pay a civil penalty of $250,000. The company also agreed to register its tokens as securities and file required periodic reports with the SEC.

The SEC's investigation was conducted by Jason Casey of the Enforcement Division's Complex Financial Instruments Unit, with assistance from Judy Bizu and in coordination with the Enforcement Division's Cyber Unit. Laura Metcalfe supervised the investigation.