SoFi Technologies to cease crypto services by Dec. 19

United States personal finance company SoFi Technologies will end crypto trading services for its users by Dec. 19.

According to the Nov. 29 announcement, new crypto account openings on SoFi are suspended immediately. All existing SoFi crypto users must either migrate their accounts to Blockchain.com or close them. In addition, customers residing in Hawaii, Louisiana, New Jersey, Nevada, Tennessee, Texas or Virginia must liquidate certain altcoins unsupported on Blockchain.com prior to account transfers. New York clients of SoFi crypto must close their accounts by January 2024 due to the unavailability of Blockchain.com in the state.

The company did not state a reason for ending its crypto services. However, reports have suggested that the sector is facing wider scrutiny from banking regulators. The decision to end SoFi’s cryptocurrency accounts does not impact other SoFi Invest offerings, such as brokerage accounts and Individual Retirement Arrangements (IRAs).

In its latest earnings report, SoFi disclosed that it held $139 million worth of Bitcoin (BTC), Ether (ETH) and other altcoins in clients’ deposits, up from $107 million a year earlier. SoFi previously stated that “the Federal Reserve determined that SoFi Digital Assets, LLC is engaged in certain crypto-related activities that the Federal Reserve has not found to be permissible for a bank holding company under the Bank Holding Company Act and Regulation Y.” However, the company was allowed to continue its crypto operations for two years and three-year extensions thereafter, provided that it did not expand the scope of such activities or increase its risk exposure to digital assets.