SoFi Shuts Crypto Services. Here's What Customers Need To Know.

By VIVIAN MEDITHI Published November 29, 2023
 

KEY TAKEAWAYS

• SoFi Technologies is shutting down its cryptocurrency services by Dec. 19, the company announced Wednesday.
• Existing users can either opt-in to have their accounts transferred to privately-held Blockchain.com or have their accounts automatically closed.
• For users cashing out for a profit, the sale could trigger a tax implication.
• In some states where Blockchain.com does not provide services, users will have to sign up with its partner Bakkt Crypto Solutions.
• Users in New York will not be eligible for the migration and will need to sell or have their accounts liquidated.

SoFi Technologies (SOFI) will shut down its crypto services by Dec. 19. Existing accounts will have the choice to migrate to Blockchain.com platform or be closed and liquidated at that time, with a few caveats.

What Does This Mean For SoFi Crypto Customers?

Existing SoFi cryptocurrency customers should receive an email today with details of the migration.
Users who want to migrate to Blockchain.com will have to actively opt-in for their account to be transferred.1
 The migration will expand the services available to these crypto accounts, including access to more tokens, advanced trading features, and security measures including the ability to self-custody crypto.2

Should I Close My SoFi Crypto Account Instead?

SoFi users who want their crypto accounts closed can proactively do so before Dec. 19.
On that day, active accounts will automatically be liquidated and closed; users will receive details of that transaction via email and receive proceeds through their brokerage account within 60 days.1
 The migration is expected to be completed by 11 p.m.
But the one big deterrent could be the tax implication of liquidating your holdings. If you make a profit, you could be on the hook to pay capital gains tax on that sale.

Different Rules For Different States and Tokens

Blockchain.com does not directly offer services in all U.S. states. There are also certain tokens that will be restricted for migration to Blockchain.com in certain states.
Customers in Virginia, Hawaii, Louisiana, New Jersey, Nevada, Tennessee and Texas will receive services through a partnership with Bakkt Crypto Solutions and customers will need to agree to Bakkt's terms and conditions.3
Additionally, Tokens including Aave, Stellar, Uniswap, and Polkadot, among others, will be automatically sold at the time of account migration on Dec. 19 for customers in those states.1
Users in the state of New York are not eligible to migrate at all. These accounts will remain open until Jan. 28. Trading on these accounts will proceed as normal until the Dec. 19 deadline; between Dec. 19 and Jan. 28, accounts will not be able to buy cryptocurrency—only sell. After Jan. 28, accounts will be closed and liquidated under the same structure as other users.1

Why Did SoFi Wind Down Crypto Operations?

SoFi's exit from the crypto business has been planned over the past two years.
The company received a conditional approval from the Office of the Comptroller of the Currency (OCC) to operate as a bank holding company in January 2022. That approval hinged on SoFi not engaging in any crypto-related activities or services without approval from the OCC, the company said in a filing dated September 2022.
"[T]he Bank Holding Company Act permits us to continue our current digital assets related offering for a two-year conformance period from the date we became a bank holding company," the filing said.4
The company has also said in the past that cryptocurrency is not a material part of its business. SoFi shares were up roughly 2% at 2 p.m. Eastern.
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