Senators Asked Bank Regulators to Review SoFi’s Crypto Business

On November 21, 2022, four Democratic members of the U.S. Senate Banking Committee asked federal bank regulators to review SoFi’s cryptocurrency business and separately pressed chief executive Anthony Noto to explain how the company would bring that business into conformity with banking law.

Senators Sherrod Brown, Jack Reed, Chris Van Hollen and Tina Smith addressed one letter to Federal Reserve Vice Chair for Supervision Michael Barr, Federal Deposit Insurance Corporation Acting Chair Martin Gruenberg and Acting Comptroller of the Currency Michael Hsu. Their intervention mattered because SoFi was no longer only a fintech offering retail crypto access: its 2022 bank acquisition had placed the group inside the federal banking perimeter while leaving a nonbank digital-asset subsidiary operating under a time-limited conformance arrangement.

The regulatory hinge

The senators’ letters traced the issue to approvals issued on January 18, 2022. The Federal Reserve approved SoFi’s acquisition of Golden Pacific Bancorp and gave the company two years to divest SoFi Digital Assets or conform activities the Board had not found permissible for a bank holding company or financial holding company. The Office of the Comptroller of the Currency conditionally approved SoFi Bank, N.A. and emphasized that the national bank’s crypto activity would be limited.

The lawmakers alleged that SoFi had apparently expanded retail digital-asset operations during that conformance period. They pointed to a service announced on March 22, 2022 that let qualifying direct-deposit members direct part of each deposit into cryptocurrency without a purchase fee. Their letters asked for details about SoFi’s conformance plan, the legal analysis supporting its activities, risk and capital treatment, and consumer disclosures.

Those statements were allegations and oversight questions, not a regulatory finding. The November 21 letters did not establish that SoFi had violated banking law, and the senators could not themselves issue a supervisory order.

SoFi answered in an SEC filing

SoFi responded on November 21 through a Form 8-K furnished to the Securities and Exchange Commission. The company said it believed it was fully compliant with its bank-license mandates and applicable law, maintained dialogue with regulators, and regarded cryptocurrency as a non-material part of its business.

The filing supplied two bounded measurements. Brokerage-related fees, a category that included all cryptocurrency-related fees but was not limited to them, totaled $3.85 million during the three months ended September 30, 2022. The fair value of digital assets held by third-party custodians for members and recorded on SoFi’s consolidated balance sheet was approximately $132.5 million as of September 30.

Neither figure measured November 21 trading volume, customer losses, liquidity or SoFi’s net economic exposure. The fee total cannot be treated as crypto revenue because the category also included non-crypto brokerage fees. The custody balance was a point-in-time accounting figure, not proof of reserves or a measure of assets owned beneficially by SoFi.

The company also said its crypto service allowed buying and selling through third-party partners, without leveraging or yield products, and that it neither partnered with FTX nor had direct exposure to FTX. That was a contemporaneous company representation in a furnished filing; it was not an independent audit conclusion.

Why the letters mattered

The dispute showed how crypto oversight could move through bank supervision even without comprehensive digital-asset legislation. Once a fintech owned a national bank, the legal separation between the insured bank, its holding company and a nonbank crypto affiliate became central to questions about permissible activity, consumer protection and the federal safety net.

The timing sharpened the institutional concern. FTX had filed for bankruptcy on November 11, 2022, and policymakers were examining whether crypto-market failures could reach regulated banking organizations. SoFi’s denial of direct FTX exposure narrowed one immediate question, but it did not resolve the senators’ broader challenge about conformance.

As of November 21, no agency response or enforcement action accompanied the letters, the two-year conformance period had not expired, and SoFi’s crypto service had not been ordered closed. The verified development was scrutiny and a documented corporate rebuttal—not a final legal judgment.