SoFi says it is exiting the cryptocurrency business next month.
The digital finance firm has told customers that they will either need to liquidate their accounts or move their funds to the crypto exchange Blockchain.com, Bloomberg reported Wednesday (Nov. 29), citing an email the company sent its users.
Members have until Dec. 19 to move their assets or have them terminated, the company’s email said, per Bloomberg.
SoFi last year received a banking charter via the U.S. Office of the Comptroller of the Currency. But as PYMNTS noted at the time, that charter was contingent on the company’s agreement to exit the crypto trading space.
This year has also seen the Federal Reserve Board increase its oversight into the cryptocurrency sector, announcing in August it planned to supervise “novel activities,” a term that covers partnerships with non-banks, along with crypto and blockchain-related activity.
“The goal of the novel activities supervision program is to foster the benefits of financial innovation while recognizing and appropriately addressing risks to ensure the safety and soundness of the banking system,” the Fed said in a news release.
In addition, the Fed said that state-chartered banks will need its blessing to issue, hold or transact in stablecoins for payments.
To gain that approval, the Fed said, banks need to demonstrate they have established proper risk management practices, “including having adequate systems in place to identify, measure, monitor, and control the risks of its activities.”
Meanwhile, Blockchain.com President Lane Kassleman told Coindesk that SoFi still wants to offer its customers crypto services, hence the partnership with his company.
“So you’ll still be able to link out to crypto products from the SoFi app,” Kassleman said. “You just won’t be able to access them within the SoFi domain. This is not dissimilar to how they offer insurance products, for example.”
He added that the partnership equates to hundreds of thousands of users and hundreds of millions of dollars.
“It’s also not something that happened overnight. You can imagine the complexity of moving over all these users and so this partnership has been in preparation for over a year,” he said.
The Coindesk report noted that SoFi held digital assets of a little under $140 million as of the end of September.
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