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SoFi, the online personal finance company, has announced it will be exiting the cryptocurrency business after facing an increase in regulatory scrutiny. The company had been providing cryptocurrency trading services for its customers since 2018.
In a blog post, SoFi said it was putting its crypto business to rest due to the “regulatory landscape” and the fact that it was not “core to the value proposition” it offered customers. This was likely due to both increased scrutiny from regulators on cryptocurrency businesses as well as the potential reputational risk of offering such services.
SoFi joined a growing list of financial companies that have either abandoned or scaled back their cryptocurrency activities in the face of increased governmental scrutiny. This includes banks like JPMorgan and Goldman Sachs, which have both pulled back on offering cryptocurrency products and services.
SoFi’s decision to exit the cryptocurrency business is a cautionary tale to other companies in the space as to the importance of understanding the risks associated with offering such services. Going forward, companies need to pay close attention to the regulatory environment in order to assess the viability of offering cryptocurrency products.
