SoFi Technologies, a renowned financial technology firm, has announced its decision to withdraw from the crypto business. This move comes amid heightened regulatory pressures in the United States, signaling a changing tide in the crypto industry.
SoFi, based in San Francisco, has been a notable player in the crypto market, allowing its users to trade over 20 different cryptocurrencies, including Bitcoin, Dogecoin, and Ethereum.
SoFi Sunsets Crypto Arm
However, the company stated that it would end its crypto services on December 19. From this date, eligible customers can either migrate their accounts to Blockchain.com, a UK-based platform, or close their accounts entirely.
This decision excludes crypto users in New York, where state regulations limit such migrations.
This strategic pivot by SoFi reflects the broader challenges facing the crypto industry. The sector has witnessed the collapse of several key players since last year. The fall of Sam Bankman-Fried’s FTX is the most notable by far.
Despite a recent improvement in investor sentiment, largely buoyed by a series of filings for spot bitcoin exchange-traded funds, the industry remains under close scrutiny.
Read more: How To Prepare for a Bitcoin ETF: A Step-by-Step Approach
Finance Regulators Bring Out Firepower Against Binance
The backdrop to SoFi’s exit is further colored by recent developments involving Changpeng Zhao, the former CEO of Binance, one of the world’s largest crypto exchanges. Zhao recently entered a guilty plea for violating US anti-money laundering laws, part of a significant $4.3 billion settlement.
Zhao emphasized the security of user funds amid the turmoil:
“On that note, I am proud to point out that in our 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. Funds are SAFU.”
This case highlights the growing scrutiny by the US Securities and Exchange Commission and other regulators on the crypto market.
SoFi’s move could be seen as a proactive step to navigate an increasingly complex and scrutinized market. The decision to partner with Blockchain.com for the migration of its crypto services is indicative of a strategic alignment with a platform that has a more established regulatory framework in the UK.
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