Crypto Contagion Tests SoFi Shares: What's Going On?

SoFi Technologies Inc SOFI shares are trading lower Wednesday and have been sliding since the start of the week.

What Happened: On Monday, lawmakers sent a letter to the Federal Reserve urging officials to review SoFi’s crypto trading activities.

The committee aimed to highlight the risks to consumers when banks trade volatile crypto assets. The committee members also warned that SoFi’s crypto trading may be in violation of regulatory requirements.

"SoFi’s digital asset activities pose significant risks to both individual investors and safety and soundness," the committee members wrote in the letter.

The lawmakers also wrote a letter to SoFi CEO Anthony Noto, noting that SoFi's "continued impermissible digital asset activities" demonstrate a failure to "take seriously its regulatory commitments."

SoFi responded saying it plans to share all requested information with the lawmakers "in a timely fashion."

Multiple analysts have since lowered price targets on SoFi, citing increased odds of regulatory scrutiny. The lower analyst expectations appear to be weighing on the bank stock Wednesday.

• Mizuho analyst Dan Dolev maintained SoFi with a Buy rating and lowered the price target from $7 to $6.
• Wedbush analyst David Chiaverini maintained SoFi with an Outperform rating and lowered the price target from $8 to $6.

See Also: Tesla To $176? Here Are 5 Other Price Target Changes For Wednesday

SOFI Price Action: SoFi is making new 52-week lows on Wednesday.

The stock was down 1.51% at $4.57 at time of publication, according to Benzinga Pro.

Photo: Mohamed Hassan from Pixabay.