The news: US senators sent a letter to the CEO of SoFi Technologies questioning the firm’s digital asset activities, per PYMNTS.
How’d we get here? Four members of the Senate Banking Committee also sent the letter to Fed officials and financial regulators, asking them to look into SoFi’s recent digital currency activities.
The senators demanded a response to their letter by December 8. SoFi took to Twitter to state that it has not violated any federal banking regulations, that it consistently communicates with its financial regulators, and that it looks forward to providing a timely response to the letter.
Why does it matter? So far, the crypto upheaval that has defined 2022 has been contained within the digital asset markets. Lawmakers and regulatory authorities have been keeping an eye on what’s unfolding, but have done little in the way of regulating the space. So why are they concerned about SoFi?
The bottom line: SoFi likely will respond to the letter by defending its actions, but this isn’t a battle the company should pick. On the heels of the FTX collapse, SoFi’s steadfastness in publicly defending its digital asset activities is bad optics at best. Even if the company hasn’t violated any regulations, consumers and regulators are on high alert about these assets and will be quick to jump on any seemingly suspicious behavior. Keeping a low profile is the best course of action for SoFi.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.