$4 Billion US Fintech Startup Sofi Receives New York Bitlicense
Sofi is a startup valued at over $4 billion which is focusing on providing millennials with student loan refinancing, personal loans, mortgages, and other wealth management and financial services. In September it has added crypto trading to its investing platform as a response to demand from its over 800,000 members, a service it can now offer it’s New York customers thanks to a new local Bitlicense.
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It was announced on Tuesday that the New York State Department of Financial Services (DFS) has approved the application of Sofi Digital Assets, LLC, a wholly-owned subsidiary of Social Finance, Inc., for virtual currency and money transmitter licenses. The two licenses will allow Sofi to offer its New York clients the ability to buy and sell digital assets. The company now is authorized to support the cryptocurrencies bitcoin core (BTC), bitcoin cash (BCH), ether (ETH), ether classic (ETC), litecoin (LTC), and stellar lumens (XLM).
“Putting our members’ interests first is our top priority at Sofi,” said Anthony Noto, the CEO of the company. “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.”
A New York Bitlicense is considered one of the hardest in the world for companies to receive. This greatly limits the ability of local residences to engage with unlicensed ventures as only companies that can withstand the long and costly procedure even apply. Since 2015, DFS has granted only 24 virtual currency licenses or trust charters, including the last one given to Sofi on Tuesday.
“DFS is committed to fostering innovation in New York’s vibrant virtual currency sector and ensuring its competitiveness as a market for new entrants,” said Financial Services Superintendent Linda A. Lacewell. “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.” $4 Billion Online Finance Startup
Sofi is a San Francisco-based fintech company founded in August 2011 and already valued at about $4.3 billion as of earlier this year. Its offering is focusing on providing millennials with student loan refinancing, personal loans, mortgages, and other wealth management and financial services. Sofi raised capital funding to a total of $2.3 billion with help from major investors such as the Japanese conglomerate Softbank and the Qatar Investment Authority.
In February 2019, it was reported that Sofi was planning to enter the crypto-assets market by enabling its users to follow and buy coins via a partnership with the U.S. exchange Coinbase. In September the company announced that it has added crypto trading to its fast-growing Sofi Invest platform, as a response to demand from its over 800,000 members. Sofi Invest now offers automated and active investing with stocks, ETFs, and crypto through a single app.
“Feedback from our members has made it clear that a significant percentage are not only interested in learning more about cryptocurrencies but are also already buying and selling crypto,” said at the time Sofi CEO Anthony Noto. “We’re very pleased to be adding this new product to Sofi Invest, as access, education, and keeping costs low for our members is at the heart of what we do.”
What do you think about Sofi receiving a New York Bitlicense? Share your thoughts in the comments section below.
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Avi Mizrahi is an economist and entrepreneur who has been covering Bitcoin as a journalist since 2013. He has spoken about the promise of cryptocurrency and blockchain technology at numerous financial conferences around the world, from London to Hong-Kong. Please enable JavaScript to view the comments powered by Disqus.