SoFi, an online banking platform, has announced that it is discontinuing its cryptocurrency trading service. Customers were notified of this decision via an email sent on Wednesday morning.
The company’s existing crypto customers will have the opportunity to migrate their assets to Blockchain.com, known primarily for its digital wallet services.
SoFi, a high-yield savings account provider-cum-investing platform, first offered crypto trading in 2019. Until recently however, it has been managing its operations under a two-year conditional approval granted by the Federal Reserve.
The San Francisco-based bank appears to be the first domino to fall following the Fed’s “novel activities supervision program” introduced over the summer. This program imposes stringent requirements on how banks interact with emerging financial technologies, including cryptocurrencies.
A SoFi spokesperson said the decision to end SoFi’s crypto services was spurred by the Federal Reserve’s regulatory guidance for its digital asset business following SoFi’s approval as a bank holding company. SoFi found it increasingly unlikely their crypto business would be fully approved after seeing the Fed’s crypto requirements grow more strict over time, the spokesperson said.
Read more: SoFi says ‘no assurance’ of meeting Federal Reserve crypto standards
SoFi customers have until Dec. 19 to shuttle funds to Blockchain.com, but state regulations will force some out of their crypto investments entirely.
New York residents will be forced to sell all their SoFi crypto, while residents in a smattering of other states including Texas have to sell a set of tokens including DeFi-natives AAVE, COMP, MKR, and UNI.
A spokesperson for Blockchain.com said the company saw “tens of thousands” of SoFi customers agree to migrate their crypto to the platform immediately following the announcement. Blockchain.com expects that the majority of SoFi’s crypto clients will choose to migrate, as selling their holdings could result in tax liabilities.
Blockchain.com announced a $110 million funding round, the fourth-largest crypto raise in 2023, earlier this month.
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