New York State Permits SoFi to Sell Cryptocurrencies
Empire State residents will now have another option for trading cryptocurrencies. This week the New York State Department of Financial Services approved FinTech lender turned jack-of-all-trades SoFi for a BitLicense. The move means that users in the state will now be able to buy and sell crypto on the SoFi Invest platform.
In a press release announcing the decision, SoFi’s CEO Anthony Noto remarked, “Putting our members’ interests first is our top priority at SoFi. That includes both offering individuals the products they want, like cryptocurrency within SoFi Invest, as well as protecting them, through a solid regulatory framework like that created by the New York State Department of Financial Services.” He added, “We’re thrilled to now be able to offer the trading of cryptocurrency, in addition to active and automated investing, as part of SoFi Invest in New York State, in addition to the full suite of SoFi products that help our members borrow, save, spend, invest, and protect their money.”
As Noto mentions, SoFi has been on a product expansion streak over the past several months. This includes launching a hybrid cash management account called SoFi Money that offers high-yield savings as well as free ATM access via their debit card. Additionally the company has two versions of its SoFi Invest accounts: an Active account that allows users to trade stocks and ETFs commission-free and an Automated account that functions as a roboadvisor. Of course their crypto platform is an extension of SoFi Invest, currently supporting trading of Bitcoin, Ethereum, and Litecoin.
Also alluded to in Noto’s statement is the fact that New York has been one of the strictest states when it comes to oversight of cryptocurrencies. Notably SoFi’s BitLicense comes nearly 18 months after Square celebrated its ability to offer Bitcoin on its Cash app. At the time, the company was only the ninth to gain such approval. A couple of months later Square also passed regulatory muster in Wyoming, Georgia, and Hawaii, enabling BTC trades for Cash users in all 50 states.
Meanwhile SoFi’s news comes as Bitcoin is experiencing a mini-rally (or trying to). Today the price against the U.S. dollar soared from around $7,200 to nearly $7,800 in a short period of time. However, as of this writing, it’s settled for the midground, hovering between $7,450 and $7,500.
Ultimately SoFi’s New York approval is unlikely to be Earth-shattering for the FinTech or for Bitcoin. At the same time, the more company’s that go through this type of regulatory scrutiny and come out the other side, the more cryptocurrencies are legitimized. Thus it’s fair to count this as a small victory in an otherwise ho-hum year.