SoFi soars 17% after it get approval to become a bank – but the green light comes with the condition that it can't do any business in crypto
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- SoFi Technologies surged after it received conditional approval from the OCC to create a full-service national bank.
- The good news, however, came with a caveat: SoFi cannot engage in any activity relating to crypto.
- The stock jumped 17% to $14.19 in pre-market trading on Wednesday.
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Shares of financial technology firm SoFi Technologies surged on Wednesday, a day after it received conditional approval from the Office of the Comptroller of the Currency to create a full-service national bank.
The good news, however, came with a caveat: SoFi cannot engage in any activity relating to cryptocurrencies unless specifically granted later by the agency, Acting Comptroller of the Currency Michael Hsu said in a statement.
The stock jumped 17% to $14.19 in pre-market trading on Wednesday. News of the regulatory green light also sent SoFi to the top of the list of most mentioned stocks on Reddit's Wall Street Bets forum, overtaking the usual favorite, GameStop.
The OCC late Tuesday approved applications from SoFi Technologies subsidiary Social Finance to create SoFi Bank. The office said SoFi still needs to move past conditional status and become a full-service national bank.
As part of the transaction, SoFi Bank will acquire Golden Pacific Bank, National Association, a national bank insured by the Federal Deposit Insurance Corporation. SoFi Bank will then have $5.3 billion in total assets and $718 million in capital at the end of the first year of operation, the OCC said.
SoFi Bank, a fully digital, mobile-first national lending platform, will be headquartered in Cottonwood Heights, Utah.
The OCC first gave SoFi preliminary approval for establishing a national bank in October 2021, pending a thorough evaluation.
"This incredible milestone elevates our ability to help even more people get their money right and realize their ambitions," said Anthony Noto, CEO of SoFi, said in a statement. Noto was a former Twitter executive, who was said to have joined SoFi when the firm was arguably at its lowest point.
SoFi went public in June 2021 through a merger with Social Capital, a blank-check firm backed by Chamath Palihapitiya, a former Facebook executive dubbed the SPAC King.