San Francisco-based SoFi bank recently released its second-quarter earnings report, revealing that it holds almost $170 million in cryptocurrency on its balance sheet. This marks a significant increase in its crypto holdings compared to the previous quarter. SoFi serves over six million customers in the United States and has become a major player in the crypto space.
The bank’s crypto portfolio includes Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Cardano (ADA), Solana (SOL), Dogecoin (DOGE), and Ethereum Classic (ETC). Out of the total $166 million of crypto investments, SoFi holds $82 million worth of BTC and $55 million worth of ETH. DOGE has become the third-largest holding at almost $5 million, while ADA holdings total $4.5 million. The bank has also revealed that it has onboarded over 500,000 customers and now supports trading for over 22 different cryptocurrencies.
In addition to holding crypto, SoFi offers its customers the ability to buy and sell various cryptocurrencies. However, the bank does not currently provide any staking services. The venture into the crypto market began in September 2019 when SoFi partnered with the Coinbase crypto exchange to offer these services. It is worth noting that SoFi was not initially a bank when it started offering crypto services. It obtained its banking license in February 2022, making it one of the few traditional banks to provide crypto services.
While SoFi’s foray into the crypto industry has been successful, it has not been without controversy. The bank’s crypto offerings have drawn scrutiny from the U.S. Federal Reserve and lawmakers. In November 2022, a U.S. Senate committee raised concerns about SoFi’s compliance with banking laws and reminded the bank of a January 2024 deadline. SoFi Bank has yet to provide clarity on how its compliance deadline may affect its crypto holdings.
The association between the crypto sector and mainstream banking is considered a crucial step towards mass adoption. However, following a turbulent 2022 and the collapse of several crypto-focused banks in 2023, the future of this partnership remains uncertain. In an effort to contain the damage and protect customers’ funds, U.S. lawmakers intervened, but this has hindered future partnerships between crypto and traditional finance. Regulators have pointed to crypto as a contributing factor in the collapse of these banks.
Overall, SoFi’s substantial crypto holdings and its provision of crypto services signal the increasing integration of digital assets into the traditional banking system. While regulatory challenges remain, the adoption of cryptocurrencies by mainstream banks is a significant development for the crypto industry and could pave the way for wider acceptance and use of digital assets in the future.