US Senators Sherrod Brown, Jack Reed, Chris Van Holland, and Tina Smith have written open letters to digital finance firm SoFi and several bank regulators. crypto- money demanded a “review” of their services.
Senators Raise Concerns About SoFi’s Listing of Dogecoin
In the letter to SoFi, the company’s growth in crypto business, how customers hold their crypto, and a blog post on the company’s website are cited as an example of a “pump and dump” coin. Dogecoin (DOGE) Concerns were expressed about the listing.
Senators asked SoFi to explain how it lists cryptocurrencies for sale, handles customer complaints, and determines “appropriate credit, market and operational risk capital requirements for digital asset risks.”
The letter to the company also asked whether SoFi lists any cryptocurrencies that are securities, and if it does, it has a license to offer securities.
In a separate letter addressed to Michael Barr, Vice President of Federal Reserve Audit, Martin Gruenberg, Acting Chairman of the Federal Deposit Insurance Corporation, and Michael Hsu, Acting Currency Comptroller, SoFi has “committed not to expand its unauthorized activities” but the company’s “digital asset sale activities apparently appear to be expanded”.
“Cryptocurrency Collapse Didn’t Jump to Banking Sector Thanks to Regulatory Protections”
The letter included the following statements:
“SoFi’s digital asset activities pose significant risks to both individual investors and security and resilience. This summer bitcoin and the spread of the crisis in the banking system was limited by regulatory protections, as we saw in the crypto crash where cryptocurrencies lost over $1 trillion in value in a matter of weeks.
If crypto-related risks in SoFi Digital Assets ultimately require its parent, bank holding company, or affiliated national bank to seek emergency liquidity or other financial assistance from the Federal Reserve or the FDIC, taxpayers may be in a difficult position.”
A SoFi spokesperson said in a statement that the company allows its members to buy and sell cryptocurrencies but does not provide any other crypto-related financing activities.
*Not investment advice.
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