Wednesday, December 4, 2021

Financial Firm SoFi Receives Virtual Currency and Money Transmitter License from New York Department of Financial Services

California-based financial firm SoFi has received virtual currency and money transmitter license from the New York Department of Financial Services (DFS), the New York regulator said in a press release on December 3.

Linda A. Lacewell, the superintendent of Department of Financial Services (DFS), made the announcement about the approval of SoFi Digital Asset’s application for virtual currency and money transmitter licenses.

These two licenses will allow SoFi Digital Assets to offer crypto trading services to its New York customers. The firm is authorized to support Bitcoin, Bitcoin Cash, Ether, Ether Classic, Litecoin, and Stellar Lumens.

Linda A. Lacewell, commented:

DFS is committed to fostering innovation in New York’s vibrant virtual currency sector and ensuring its competitiveness as a market for new entrants. The Department’s approval of SoFi’s virtual currency and money transmitter licenses provides consumers with more choices in a continuously evolving global financial services marketplace.”

The NYDFS license, also called BitLicense, was initially launched in 2015 to regulate those who provide services in virtual currency transmission, custody of crypto assets, buying and selling of cryptocurrencies, exchange services, issues a virtual currency. Sofi, a wholly owned subsidiary of Social Finance Inc., is now one of 24 crypto-related firms that have obtained a BitLicense since 2015, according to the press release.

In early days, the BitLicense was criticized a lot because of the strict regulatory requirement and burdensome process as it required a 31-pages application form that had to be completed just to apply for the license. In first three years, the New York regulator was able to approve only five crypto-related companies. But the process gained the pace and today, number of companies are DFS approved.

SoFi, based in San Francisco, California, was founded in April 2011. The company offers a range of lending and wealth management services. The firm mainly focuses on early-stage professionals such as students and offers variable and fixed rate parent, personal, and MBA loans, mortgage refinancing, and more.

The firm showed its intensions to offer cryptocurrency services to its customer earlier this year, when SoFi’s CEO Anthony Noto noted that the company, in collaboration with Coinbase, would launch cryptocurrency trading in the second quarter of this year. The company began offering crypto trading services in September through its SoFi Invest platform.

Anthony Noto, on the approval, commented:

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. 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.”

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