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Sofi stock is back in the news today! The U.S. Senate Banking Committee is specifically investigating whether SoFi’s crypto service complies with U.S. banking and consumer protection laws.
Last year, SoFi finally acquired a small bank called Golden Pacific Bancorp to obtain a banking license, which would allow it to hold deposits and issue funds within the bank. As part of its approval of the agreement, the Federal Reserve said in a letter that “SoFi is currently working on crypto-asset activities that the Board has not decided will be authorized” with the help of SoFi Digital Assets, which provide access to users. buy and sell cryptos.
The Fed also said that during these two years, SoFi agreed not to increase “the range of [crypto] products and services offered.” The committee is concerned that SoFi has actually done this by allowing customers to put part of their deposits directly into cryptocurrencies without paying any fees. The committee is also questioning whether SoFi is holding the right amount of digital assets on its balance sheet and whether it is paying enough attention to the crypto assets it allows customers to buy and sell. Customers can buy and sell more than 30 cryptocurrencies through SoFi’s online store. The investigation is likely in response to the FTX debacle, which got the administration and lawmakers on edge.
Let us explain some of the words we used in the paragraph above. Current liabilities are the part of the company’s debt that is payable within one year, while long-term debt is the part that is due in more than one year. Equities include all cash and liquid securities with maturities of 90 days or less. Total debt equals current debt plus long-term debt minus cash equivalents.
Sources: https://www.fool.com/investing/2022/11/21/why-shares-of-sofi-are-falling-today/
https://www.cnbc.com/2022/11/21/democratic-senators-urge-regulators-to-monitor-sofi-crypto-trading-activity.html
https://www.benzinga.com/news/22/11/29807683/what-does-sofi-technologies-debt-look-like
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