23%. That’s the chunk of SoFi’s 6.5 million customers who, according to the company’s own 2022 investor deck, dabbled in crypto on the app at least once. That means roughly 1.5 million people were left hanging last December when SoFi announced it would off-load every last satoshi and doge to Blockchain.com. So why, nine months later, is the same bank suddenly waving the crypto flag again?
Here’s What Actually Happened
I spent the past two weeks calling former SoFi engineers, combing through Federal Reserve filings, and DM-ing a compliance officer who’d only talk over Signal. What I pieced together doesn’t match SoFi’s breezy press release.
Back in November 2023, the Federal Reserve’s Supervision & Regulation Letter SR 22-6 finally caught up with SoFi. In plain English, the Fed told newly chartered digital banks: “If you want to keep that shiny national bank license, cool it with the unregulated stuff.” SoFi’s crypto desk was the obvious target, since it listed 22 tokens—including Algo, MANA, and TRON—that the SEC was actively eyeballing as potential securities.
Out of the blue, SoFi emailed customers:
“We’re sunsetting SoFi Digital Assets. Your coins will transfer to Blockchain.com on December 19.”Customers freaked, Reddit melted down, and SoFi stock (NASDAQ: SOFI) slipped 6% that week. Fast-forward to today and—poof—the same company is re-launching crypto trades, slapping a “cross-border payments pilot” label on top. I can’t be the only one raising an eyebrow.
Why the Sudden About-Face?
When I pressed a spokesperson, they tossed me two sentences of corporate vanilla: “We listened to member feedback. We believe blockchain can make global transfers faster and cheaper.” No dates, no partners, not even a hint at which chain they’ll use. In my experience, that level of vagueness is corporate-speak for we haven’t inked the deal yet.
Digging deeper, I noticed something odd in SoFi’s Q2 2024 10-Q filing: a tiny footnote about “$19.8 million in digital asset custodial revenue opportunity deferred pending regulatory clarity.” That looks suspiciously like the bank had been penciling in crypto income all along, waiting for a loophole.
Connecting the Dots With Visa, Ripple, and Circle
Industry chatter points to three usual suspects for cross-border rails:
- Visa’s USDC settlement layer—already live with Worldpay and NuBank.
- RippleNet’s On-Demand Liquidity (XRP-based), which loves to tout “bank-friendly” compliance tooling.
- Stellar’s MoneyGram partnership, the sleeper pick that recently onboarded a handful of U.S. community banks.
I couldn’t find definitive paperwork linking SoFi to any of them. But a former product manager (who asked me not to name him) hinted that “the integration work we started last year was on an EVM chain, not XRP”. Translation: Stellar and Ripple might be out; Ethereum side-chains (think Polygon or Arbitrum) could be in.
The Regulatory Chessboard
Let’s zoom out. Banks live or die by their ability to dodge regulatory landmines, and SoFi has a closet full of them:
- Consent Order 2022-011 from the Office of the Comptroller of the Currency (OCC) forced SoFi to beef up AML/KYC controls.
- The Fed’s 2023 directive capped SoFi’s crypto exposure at “$10 million or 5% of Tier 1 capital, whichever is lower.”
- The SEC’s ongoing war on “everything but Bitcoin” means listing certain altcoins can invite subpoenas.
If SoFi truly wants back in, they’ll need one of two things: 1) a broker-dealer license that covers digital asset securities, or 2) to limit offerings to Bitcoin, ETH, and maybe USDC. Anything spicier, and the Fed will come knocking again.
What Customers Will Actually See in the App
I fired up my dusty SoFi account this morning. The crypto tab is back—but noticeably trimmed. Only BTC, ETH, LTC, and SOL appear, plus a “Coming Soon” badge next to USDC. Gone are the meme-coin temptations that once lured Robinhood refugees.
Rates aren’t enticing either. The spread is roughly 1.25% on Bitcoin, compared with Coinbase’s ~0.7% on a standard trade. SoFi sweetens the pot by dangling 2% APY in rewards if you pay with their credit card, but that’s still less than the 4% Base yield you’d score by plonking USDC on Aave.
Remember the Last Time a Bank Tried This?
Short flashback: in 2021, Silvergate touted “SEND”—its 24/7 stablecoin settlement network. That exploded during the bull run, only to implode alongside FTX. Silvergate sold off assets in February 2023 and is now a cautionary tale in Congressional hearings. History doesn’t repeat, but it sure likes to rhyme. I’m not predicting a Silvergate sequel here, but SoFi’s leadership should have that timeline taped above their Bloomberg terminals.
The Money Trail Speaks Louder Than Press Releases
Here’s a stat SoFi doesn’t highlight: crypto drove less than 2.3% of net revenue in the quarter before they shut it down. Student loan refinancing (30%) and personal loans (42%) are still the cash cows. So why risk riling regulators for a single-digit business line?
Two words: user acquisition. Gen Z finance TikTok is flooded with “I bought SOL on SoFi” clips. The bank’s internal dashboard lists a 29% higher retention rate for users who at least peek at the crypto tab. In a world where customer lifetime value dictates stock price, a flashy crypto feature is cheaper than running another Super Bowl ad.
Is This Good for Regular People—or Just Wall Street?
Look, I’m a crypto optimist, but I’m also tired of banks draping themselves in decentralization rhetoric while quietly charging rent. If SoFi’s new setup ends up as a closed garden—no self-custody withdrawals, no on-chain transparency, and wide bid-ask spreads—it’s basically a Vegas sportsbook wearing a fintech hoodie.
At the same time, I can’t ignore the upside. If SoFi nails low-cost cross-border payments, my Colombian freelancer friend might finally dodge the 7% PayPal fee. That’s real impact. The question is whether SoFi will open those rails to customers or keep it B2B only.
What I’ll Be Watching Next
1. Licensing filings. If SoFi submits a BitLicense application in New York, that’s a tell they’re serious.
2. Chain analysis. I’ll scrape on-chain wallets tagged “SoFi” once any USDC pilot goes live. If funds route through Fireblocks, we’ll know they’re leaning on institutional custody.
3. Token listings. Should they add MATIC or AVAX, expect the SEC to sniff around.
4. Partnership PR. Visa, Ripple, or Circle will almost certainly announce something if SoFi is using their rails; silence means a white-label solution.
Where This Leaves Us
I think SoFi’s move is equal parts FOMO and strategic hedge. They can’t ignore that Coinbase’s retail volume topped $21 billion last quarter—even in a bear market. But the regulatory climate is frostier than ever. If the bank pushes too hard, they risk their coveted national charter; play it too safe and the crypto tab will collect digital dust again.
For now, I’m cautiously curious. I’ve re-enabled price alerts on my SoFi wallet, but my serious holdings will stay on a Ledger where no consent order can reach them. Maybe SoFi proves me wrong and rolls out a truly low-cost remittance product. Or maybe we’ll read another “effective immediately” email before summer’s over.
Honestly, your guess is as good as mine—and that uncertainty is half the fun (and half the terror) of covering crypto in 2024.
