SoFi Technologies, a reputable financial technology firm, has declared its intention to exit the cryptocurrency business. This decision arises in the face of heightened regulatory pressures in the United States, signaling a shift in the cryptocurrency industry.
Headquartered in San Francisco, SoFi has played a significant role in the cryptocurrency market, enabling users to trade more than 20 different digital currencies, including Bitcoin, Dogecoin, and Ethereum.
No more crypto for SoFi
Despite its previous involvement, the company has announced the cessation of its cryptocurrency services on December 19th, 2023. After this date, eligible customers can either transfer their accounts to Blockchain.com, a platform based in the UK, or close their accounts altogether. It is worth noting that this decision does not apply to cryptocurrency users in New York, where state regulations impose restrictions on such migrations.
The strategic shift reflects the broader challenges confronting the cryptocurrency industry, which has witnessed the downfall of several key players since the previous year. The notable collapse of FTX, led by Sam Bankman-Fried, stands out among these challenges. Despite a recent upturn in investor sentiment, primarily fueled by the filing of spot Bitcoin ETFs, the industry remains under intense scrutiny.
Regulators still at large
The context of the exit is further complicated by recent developments involving Changpeng Zhao, the former CEO of Binance. Zhao recently pleaded guilty to violating US anti-money laundering laws, resulting in a substantial $4.3 billion settlement. Zhao underscored the security of user funds amid the upheaval, stating that he is proud to point out that in the resolutions with the US agencies, they do not allege that Binance misappropriated any user funds and do not allege that Binance engaged in any market manipulation.
This case underscores the increasing scrutiny of the cryptocurrency market by the US Securities and Exchange Commission (SEC) and other regulators. In any case, the exit of SoFi could be interpreted as a proactive measure to navigate an increasingly intricate and closely scrutinized market. The choice to collaborate with Blockchain.com for the migration of its cryptocurrency services indicates a strategic alignment with a platform that operates under a more established regulatory framework in the UK.