US Senators Sherrod Brown, Jack Reed, Chris Van Holland, and Tina Smith have written open letters to Bitcoin and altcoin company SoFi and several bank regulators. He wants a “review” of SoFi’s crypto offerings. Here are the details…
Senators question altcoin company
The letter to SoFi touched upon the company’s expansion of its crypto business, how customers hold their crypto. He also expressed concern about a blog post on the company’s website listing Dogecoin (DOGE), which he cited as an example of a “pump and dump” coin. Lawmakers asked how SoFi lists cryptocurrencies, handling customer complaints. It asked him to explain how he determined “appropriate credit, market and operational risk capital requirements for cryptocurrency exposures.”
The letter to the company also asked whether SoFi lists any cryptocurrencies that qualify as securities and whether it has a license to offer securities, if any. In a separate letter addressed to Michael Barr, the Fed’s Executive Vice President of Supervision, Martin Gruenberg, Deputy Chairman of the Federal Deposit Insurance Company, and Michael Hsu, the Acting Currency Controller, SoFi is committed to “not expanding its unauthorized activities.” But he said the company is “apparently expanding its individual asset operations.”
Other concerns in the letter
In addition, according to the letter, SoFi’s crypto activities have concerns for both individual investors and security and robustness. It is stated that SoFi’s crypto activities pose certain risks. Contagion in the banking system was limited, as we saw in this summer’s crypto meltdown, where crypto assets lost over $1 trillion in value in a matter of weeks. The reason behind this was the regulators. The letter also included the following statements:
Taxpayers may be at risk if crypto-related risks in SoFi Digital Assets ultimately require the parent company, bank holding company, or affiliated national bank to seek emergency liquidity or other financial assistance from the Fed or FDIC.
SoFi spokesperson spoke
A SoFi spokesperson said in a statement that the company allows its members to buy and sell cryptocurrencies. He said, however, that he does not provide any other crypto-related financing activities. “SoFi takes our regulatory and compliance commitments seriously, including our non-bank operations in the crypto space,” the spokesperson said. He also used the following phrases:
We believe that we fully comply with the requirements of our bank license and all applicable laws. Additionally, we maintain consistent, constructive dialogues with each of our regulators. Cryptocurrency remains an intangible component of our business. We look forward to sharing the requested information in a timely manner with the Senators.
The spokesperson also said that SoFi is not exposed to FTX, FTT token, Alameda Research or Genesis Global Trading.
