SoFi Bank, the San Francisco-based financial institution, has revealed its financial records for the year’s second quarter, including massive crypto asset holdings valued at nearly $170 million. Compared to the previous quarter, this American bank, which serves a large customer base of over six million people, has significantly increased its cryptocurrency investments.
Holding Digital Assets
The San Francisco bank has a wide variety of cryptocurrencies in its digital asset portfolio, the most notable being DOGE, LTC, SOL, ETH, ADA, ETC, and BTC. These assets have a total value of $166 million, with ETH and BTC having the lion’s share at $55 million and $82 million, respectively.
Notably, the bank’s ADA holdings are valued at $4.5 million, closely followed by DOGE, which holds the third position with holdings close to $5 million. The report also revealed that SoFi has successfully integrated over 500,000 new customers into its ecosystem,
This rapid expansion has resulted in the platform providing trading support for over 22 cryptocurrencies. Analysts say SoFi is more than just a crypto holder; the bank allows its users to buy and trade digital assets.
But SoFi secured its banking license in February 2022, setting its position as one of the few traditional US banks involved in crypto.
At Crosshairs With Regulators
SoFi’s foray into the crypto sector has been met with strong opposition from the US Federal Reserve and legislative bodies. The clash of interest came to the fore in November 2022 when a committee of the United States Senate investigated SoFi’s activities concerning an alleged violation of banking regulations.
While acknowledging SoFi’s innovative steps, the committee raised concerns about the company’s adherence to existing banking laws in the United States. Furthermore, the United States Senate Committee raised potential compliance issues and gave the bank a deadline of January 2024 to amend its ways.
The link between cryptocurrency and the traditional banking sector has been a critical step toward widespread adoption. Even though this overlap can potentially boost crypto adoption, recent events have cast doubt on this possibility.
Last year’s crypto market meltdown, especially the FTX collapse in November, coupled with the collapse of US crypto-friendly banks earlier this year, continues to have a negative impact on the market. In a swift response, US legislators have been proactive in establishing clear crypto regulatory policies to protect investors’ funds.
However, the continued downtrend in the crypto market has cast doubt on future collaborations between crypto entities and well-established traditional finance institutions. Hence, it is no surprise that the US SEC has been enforcing regulatory actions on crypto firms and casts doubt over the promising prospects of a collaboration between the crypto space and the traditional finance (TradFi) sector.
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