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

Key Takeaways

The company announced Wednesday that SoFi Technologies will shut down its cryptocurrency services by Dec. 19.
Existing users can either opt-in to have their accounts transferred to privately-held Blockchain.com or have their accounts automatically closed.
The sale could trigger a tax implication for users cashing out for a profit.
In some states where Blockchain.com does not provide services, users must 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 can migrate to the Blockchain.com platform or be closed and liquidated with a few caveats.

What Does This Mean For SoFi Crypto Customers?

Existing SoFi cryptocurrency customers should receive an email today with migration details.

Users who want to migrate to Blockchain.com must actively opt-in for their account to be transferred. The migration will expand the services available to these crypto accounts, including access to more tokens, advanced trading features, security measures, and the ability to self-custody crypto.

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 transaction details via email and receive proceeds through their brokerage account within 60 days. The migration is expected to be completed by 11 p.m.

But the one significant deterrent could be the tax implication of liquidating your holdings. If you 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. Specific tokens will be restricted for migration to Blockchain.com in certain conditions.

Customers in Virginia, Hawaii, Louisiana, New Jersey, Nevada, Tennessee, and Texas will receive services through a partnership with Bakkt Crypto Solutions. Customers will need to agree to Bakkt’s terms and conditions.

Additionally, Tokens, including Aave, Stellar, Uniswap, and Polkadot, will be automatically sold at the time of account migration on Dec. 19 for customers in those states.

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 usual until the Dec. 19 deadline; between Dec. 19 and Jan. 28, funds cannot buy cryptocurrency—only sell. After Jan. 28, funds will be closed and liquidated under the same structure as other users.

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 conditional approval from the Office of the Comptroller of the Currency (OCC) to operate as a bank holding company in January 2022. The company said that support hinged on SoFi only engaging in crypto-related activities or services with permission from the OCC 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.

The company has also said cryptocurrency is not a material part of its business. SoFi shares were up roughly 2% at 2 p.m. Eastern.