SoFi Technologies, a prominent personal finance company in the United States, has announced its decision to cease crypto trading services for its users by December 19. The company has immediately suspended new crypto account openings, and existing SoFi crypto users are presented with two options: migrate their accounts to Blockchain.com or close them entirely.
According to the announcement on November 29, customers residing in Hawaii, Louisiana, New Jersey, Nevada, Tennessee, Texas, or Virginia must liquidate certain altcoins unsupported on Blockchain.com before transferring their accounts. New York clients of SoFi crypto face a different scenario, as they are required to close their accounts by January 2024 due to the unavailability of Blockchain.com in the state.
The company did not provide a specific reason for ending its crypto services. However, there are speculations that the broader crypto sector is under increased scrutiny from banking regulators, which may have influenced SoFi’s decision. It’s worth noting that the discontinuation of SoFi’s cryptocurrency accounts will not impact other SoFi Invest offerings, such as brokerage accounts and Individual Retirement Arrangements (IRAs).
In its latest earnings report, SoFi revealed that it held $139 million worth of Bitcoin, Ether, and other altcoins in clients’ deposits, showing a significant increase from $107 million a year earlier. The decision to end SoFi’s crypto services comes after the Federal Reserve determined that SoFi Digital Assets, LLC, engaged in certain crypto-related activities not deemed permissible for a bank holding company under the Bank Holding Company Act and Regulation Y.
Despite this determination, SoFi was granted permission to continue its crypto operations for two years, with the possibility of three-year extensions, provided it does not expand the scope of such activities or increase its risk exposure to digital assets. As the crypto landscape faces increasing regulatory scrutiny, SoFi’s move may signal a cautious approach to navigating the evolving regulatory environment. Users are now urged to make a choice between migrating to Blockchain.com or closing their SoFi crypto accounts before the looming deadline.