SoFi, the financial services platform that introduced cryptocurrency trading in 2019, has announced its decision to exit the crypto business due to increased regulatory scrutiny in the sector. The company has disabled new account creation and is giving existing users a three-week window to migrate their crypto accounts to Blockchain.com. After this period, accounts will be automatically liquidated.
Migration eligibility is subject to geographic restrictions, with users in certain states required to sell unsupported tokens like Avalanche (AVAX) and Sushi Swap. Residents of New York State are ineligible for migration.
As of Q3, SoFi held nearly $140 million in cryptocurrency, primarily in Bitcoin (BTC) and Ethereum (ETH). However, the company has faced heightened scrutiny from regulators. SoFi’s bank charter, granted in January 2022, was conditional on regulatory approval for its crypto business within two years, with the potential for three one-year extensions.
In its 10-K annual report, SoFi had acknowledged the possibility of a rapid wind-down of its crypto operations, stating that efforts were being made to align crypto-related activities with the requirements of the Bank Holding Company Act. However, there was no guarantee of success or extensions from the Federal Reserve. The company emphasized the potential need to wind down crypto activities within a short period.
