The move from SoFi comes amidst the heightened regulatory glare on the sector.

SoFi Technologies Inc., a rapidly expanding financial-services provider, is exiting the cryptocurrency market due to heightened regulatory scrutiny. The San Francisco-based company, initially focused on student-lending refinancing, diversified its services over 12 years. Having obtained a bank charter in January 2022, with conditions attached regarding its crypto business. Those necessitated regulatory approval or an exit from the digital asset sector within a two-year conformance period.

Amid increased scrutiny by banking regulators, SoFi has informed its crypto customers to liquidate their accounts or migrate to Blockchain.com, a crypto exchange and wallet provider. Federal regulatory bodies, including the Federal Reserve and the Office of the Comptroller of the Currency, have been raising concerns about lenders’ involvement in digital assets. (Bloomberg)

Despite its high-profile presence in the crypto sector since 2019, SoFi’s crypto-related fees constituted a non-material part of its business, totaling about $6 million in the three months ended September 30. With digital assets held at $139.4 million as of the same date, the fintech, anticipating $2 billion in revenue for the year, is emphasizing a swift exit from the crypto market.

Existing SoFi customers must transfer their crypto holdings to Blockchain.com by December 19, or the remaining balances will be liquidated. The terms of the agreement with Blockchain.com were not disclosed. Additionally, SoFi plans to refer its members to other crypto partners in the coming year.

Meanwhile, Blockchain.com, founded in 2011, recently secured $110 million in funding, signaling renewed interest in crypto.

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