The move is likely tied to its bank charter, which was conditionally approved with a two-year period in which it was required to receive approval for its crypto business. SoFi had previously described discussions with the Federal Reserve "to determine whether there is a path to conform our crypto-related activities to the requirements of the Bank Holding Company Act" — this move suggests they decided there was not.
SoFi neobank ditches crypto
After entering the crypto sector in 2019, the neobank SoFi is jettisoning the blockchain portion of its business by mid-December. Customers are being given the option to move their accounts to Blockchain.com; otherwise their assets will be liquidated.
- "SoFi Is Exiting Crypto With Banking Regulators Stepping Up Scrutiny", Bloomberg [archive]
- SoFi Technologies, Inc. Form 10-K, filed with the SEC
Blockchain.com shutters asset management arm
After launching an asset management business less than a year ago, Blockchain.com has announced they will be shuttering it. They blamed the ongoing "crypto winter" as contributing to the decision. The UK-based firm had planned to offer "algorithm-based risk-managed exposure" to Bitcoin, which may have proven challenging in a year of declining Bitcoin prices.
Blockchain.com lays off 25% of its employees
The cryptocurrency exchange Blockchain.com announced they would be cutting 25% of their employees, or around 150 people. They attributed the decision to the crypto market conditions, as well as the need to compensate for financial losses — likely alluding to the $270 million loss they're facing due to a loan to the now-insolvent Three Arrows Capital crypto hedge fund.
Blockchain.com also announced that they would close their Argentina-based offices, cancel plans to hire in several countries, and cut executive salaries.
Blockchain.com faces a $270 million loss from their loan to Three Arrows Capital
Crypto exchange Blockchain.com announced in a letter to shareholders that they could lose the $270 million in cryptocurrency and USD they loaned to Three Arrows Capital, a now-insolvent crypto fund that is pursuing bankruptcy. The ripple effects of the 3AC implosion have been felt throughout the crypto ecosystem, contributing to liquidity issues and the outright failure of some other platforms. Blockchain.com assured customers that they would not be one of those platforms, writing that the company "remains liquid, solvent and our customers will not be impacted", but they also would not be the first crypto company in recent weeks to assure customers that everything is fine shortly before being forced to reveal that everything is not fine at all.