SoFi to Discontinue Crypto Trading Services
SoFi Technologies, a personal finance company in the United States, has announced that it will be ending its crypto trading services for users by December 19. The company has immediately suspended new crypto account openings, and existing SoFi crypto users must either migrate their accounts to Blockchain.com or close them. Certain altcoins unsupported on Blockchain.com must be liquidated by customers residing in specific states before transferring their accounts. New York clients of SoFi crypto must close their accounts by January 2024 due to the unavailability of Blockchain.com in the state.
Reasons for the Decision
The company did not provide a specific reason for discontinuing its crypto services. However, reports suggest that the sector is facing increased scrutiny from banking regulators. It is important to note that this decision does not impact other offerings by SoFi Invest, such as brokerage accounts and Individual Retirement Arrangements (IRAs).
SoFi’s Crypto Holdings
In its latest earnings report, SoFi disclosed that it held $139 million worth of Bitcoin (BTC), Ether (ETH), and other altcoins in clients’ deposits. This amount has increased from $107 million in the previous year. SoFi was previously allowed to continue its crypto operations for a limited period of time by the Federal Reserve, but the decision to end cryptocurrency accounts indicates a change in regulatory stance.
Hot Take: SoFi Follows Regulatory Trend
SoFi’s decision to discontinue its crypto trading services aligns with the increasing regulatory scrutiny faced by the cryptocurrency industry. As banking regulators tighten their oversight, companies like SoFi are taking steps to comply with regulations or exit the sector altogether. This trend highlights the evolving landscape of cryptocurrency regulation and its impact on market participants.
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