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SoFi Shuts Down Crypto Services. Here’s what customers need to know.
Key points
- SoFi Technologies will shut down its cryptocurrency services by December 19, the company announced Wednesday.
- Existing users can choose to move their accounts to privately held Blockchain.com or have their accounts automatically closed.
- For users who cash in on a profit, the sale may have tax implications.
- In some states where Blockchain.com does not provide services, users will need to register with its partner Bakkt Crypto Solutions.
- New York users will not be eligible for migration and will have to sell or liquidate their accounts.
SoFi Technologies (SOFI) will shut down its crypto services by December 19th. Existing accounts will be able to choose whether to migrate to the Blockchain.com platform or be closed and liquidated at that time, with some caveats.
What does this mean for SoFi Crypto customers?
Existing SoFi cryptocurrency customers should receive an email today with migration details.
Users wishing to migrate to Blockchain.com will need to actively opt-in to transfer their account. The migration will expand the services available for these crypto accounts, including access to more tokens, advanced trading features, and security measures including the ability to self-custody cryptocurrencies.
Should I close my SoFi Crypto account instead?
SoFi users who wish to close their crypto accounts can do so proactively before December 19th.
On that day, active accounts will be automatically liquidated and closed; users will receive transaction details via email and will receive proceeds through their brokerage account within 60 days. The migration should be completed by 11 p.m
But the one big deterrent may be the tax implications of liquidating your holdings. If you make a profit, you could be on the be obliged to pay capital gains tax on that sale.
Different rules for different states and tokens
Blockchain.com does not directly offer services in all US states. There are also some tokens whose migration to Blockchain.com will be limited in some 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 be required to accept Bakkt’s terms and conditions.
Additionally, tokens including Aave, Stellar, Uniswap, and Polkadot, among others, will be automatically sold upon account migration on December 19 for customers in those states.
Users in New York state are not eligible for migration at all. These accounts will remain open until January 28th. Trading on these accounts will proceed as normal until the December 19 deadline; Between December 19th and January 28th, accounts will not be able to buy cryptocurrency, but only sell it. After January 28, accounts will be closed and liquidated according to the same structure as other users.
Why did SoFi stop crypto operations?
SoFi’s exit from the cryptocurrency business has been planned for the past two years.
The company received conditional approval from the Office of the Comptroller of the Currency (OCC) to operate as a bank holding company in January 2022. This approval was contingent on SoFi not engaging in any cryptocurrency-related activities or services without the approval of the ‘OCC. the company said in a statement dated September 2022.
“[T]The Bank Holding Company Act allows us to continue our current offering of digital assets for a compliance period of two years from the date we become a bank holding company,” the statement read.
The company has also said in the past that cryptocurrency is not a substantial part of its business. SoFi shares were up about 2% as of 2 p.m. Eastern.