Accusations of Scamming Plague a Blockchain-Based Loan Company

The cryptocurrency market is often riddled with news of elaborate exit scams, Ponzi schemes, and other types of frauds, leaving investors and even experienced traders with a massive loss. Such similar accusations have been thrown recently at SALT, a smart-contract lending platform with blockchain technology.

Once tipped to be a promising project in 2017, the SALT project has run into some trouble, with a bearish market sentiment all throughout 2018 before the accusations were made. At the moment, SALT has a value of $0.7052, a gradual decline from its 2017 performance.

SALT’s Market Position

The SALT project was cruising mostly throughout 2017, touted by many industry experts as a project with potential, bringing loans in the world of blockchain. In 2017, as one of the trending tokens at that time, SALT had a popular niche market. SALT’s token value rose from under $4 to over $14 in a period of just 2 months. However, things turned for the worse in 2018, when the lending platform was discontinued, which coincided with the start of a bearish crypto-market.

With the main functionality, aka “loans” removed, investors were confused about the utility of the token. This prompted a steep decline, with SALT’s value decreasing below the $1 level. Although the entire cryptocurrency market was experiencing a massive slump, SALT supporters questioned the business model of the project, which included SALT’s main Selling Point.

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Image credit: SALT Lending

SALT’s Arbitrage Promise

At the start of the project, the SALT platform promised its users, an arbitrage opportunity where they would sell their SALT tokens to pay-off the loans. However, faith in the project gradually declined as it was evident that no concrete plans were in place.

The proverbial last nail on the coffin was on July 18th, a drastic change in management took place in the SALT team. Bill Sinclair, previously the project’s CTO, became the new interim President, making investors question why a sudden change in leadership was required. Such silent disappearance “acts” have previously been associated with exit scams where the CEO resigned and went off with the investors’ money. In this case, CEO Shawn Owen seems to showcase similar threats, with accusations of SALT being an elaborate scam. In fact SALT’s co-founder, Caleb Slade stated, “Like Bitcoin, SALT has had some missteps along the way.”

Crypto-Community Reactions

The trading community, specifically SALT investors, started questioning certain loopholes in SALT’s business model. A particular Reddit user, NachoKong’s thread, especially drew attention. NachoKon labeled SALT as an elaborate scam and a “worthless shitcoin,” with the comment receiving over 150 shares and comments.

On the other hand, when the majority of crypto traders began criticizing the project, it was still evident that SALT still held strong support with some loyal backers. One such example is a user named “jp4ragon” declaring that there are no valid reasons to substantiate the claim that SALT is a scam. According to the user, projects change CEO’s all the time, which are not indicative of a scam. Things look bleak for SALT at the moment, with the project slipping to rank 136th at the time of writing.

The recent SALT scam debacle is solid proof of the unpredictable nature of the cryptocurrency market. Such exit scams have ravaged the crypto-space, which has grown exponentially since the early days of Bitcoin. For the time being though, the SALT project is still active, without a proper explanation for the change in management. The SALT PR team seems to be hard at work for maintaining  SALT’s reputation and image. With news of Nexo, previously a rival of SALT, rumored to be in talks about acquiring SALT, nothing can be stated with certainty at this time, regarding SALT’s future.

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Kaustav Das
Kaustav Das is a staff writer for Block Telegraph. He has been a tech journalist since 2016 and covers blockchain and cryptocurrency related topics on a daily basis.

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