The post U.S. bank SoFi officially exits the crypto industry appeared on BitcoinEthereumNews.com.

SoFi Technologies, a diversified financial services provider, has made a significant move away from the cryptocurrency sector. Amid a surge in token prices and heightened regulatory scrutiny, the San Francisco-based company informed its crypto customers that it would be closing their accounts in the coming weeks. This decision marks a pivotal shift for SoFi, which had expanded its offerings into the digital asset space alongside a broad spectrum of financial services. Regulatory Scrutiny and Strategic Shift SoFi’s decision to exit crypto is largely attributed to the increasing attention the sector is receiving from banking regulators. The Federal Reserve, Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency have raised concerns about the volatile nature of digital assets. In January, watchdogs denied a crypto firm’s application to become a member of the Federal Reserve, mirroring SoFi’s strategic reorientation. This move comes as part of a compliance requirement with its bank charter, received in January 2022, which stipulated a two-year conformance period for its crypto business. The company, which initially entered the crypto space in 2019, had to choose between securing the necessary regulatory approvals for its digital asset sector or exiting it. SoFi’s choice to exit reflects the challenging regulatory environment facing financial institutions in the crypto industry. SoFi’s Crypto Journey and Future Plans Starting as a student-lending refinancing company 12 years ago, SoFi had grown into a multi-faceted financial powerhouse, hosting events like Bitcoin Miami and engaging actively in the crypto market. However, crypto operations constituted a non-material part of SoFi’s business, with brokerage-related fees, including crypto, totaling about $6 million in the three months ended September 30. SoFi’s digital asset holdings stood at $139.4 million as of September 30, against a backdrop of an expected $2 billion in revenue this year. The company’s pivot away…

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Filed under: News - @ December 3, 2023 10:06 pm