SoFi Technologies, Inc.

In evaluating our company and our business, you should carefully consider the risks and uncertainties described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K, together with the other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other documents we file with the SEC. There are no material changes from the risk factors set forth in our 2024 Annual Report on Form 10-K except as set forth below. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business, reputation, financial condition, results of operations, revenue or our future prospects, or market price of our common stock.

We are working to incorporate cryptocurrency and blockchain technology into our product offerings, which may subject us to laws and regulations relating to cryptocurrencies and blockchain technology in various jurisdictions where we conduct our business, and to other risks. Such laws and regulations can be complex, are subject to change, and complying with them across various jurisdictions imposes operational, time, and cost constraints on our business. Our actual or perceived failure to comply with such obligations or to address other risks related to these technologies could harm our business and/or result in reputational harm, loss of customers, material financial penalties and legal liabilities.

We may in the future offer cryptocurrency products and other products that utilize blockchain technology which could subject us to additional regulations, licensing requirements, or other obligations. Compliance with any such regulations, requirements, or obligations may be complex and costly. Cryptocurrencies are not considered legal tender, are not backed by most governments, and have experienced technological flaws and various law enforcement and regulatory interventions. In addition, in the U.S. and certain other jurisdictions, certain cryptocurrencies may be deemed to be securities and subject to the securities laws of the relevant jurisdictions. The rapidly evolving regulatory landscape with respect to cryptocurrencies may subject us to registrations, inquiries, or investigations from regulators and governmental authorities; require us to make product changes; restrict or discontinue product offerings; and implement additional and potentially costly controls. If we fail to comply with regulations, requirements, prohibitions or other obligations applicable to us, we could face regulatory or other enforcement actions and potential fines or reputational harm, be forced to cease offering cryptocurrency products, and other consequences, including significant financial losses.

Cryptocurrencies have in the past and may in the future experience periods of extreme price volatility. These uncertainties, as well as future accounting and tax developments, or other requirements relating to cryptocurrencies could expose us to litigation, regulatory action and possible liability, and have an adverse effect on our business.

As we enter into and expand our cryptocurrency product and service offerings, the risks associated with failing to safeguard and manage cryptocurrencies we hold or our custodians hold or service providers transfer on behalf of our customers may increase. In addition, a number of errors could occur in the process of depositing or withdrawing cryptocurrencies such as typos, mistakes or failure to include information required by the blockchain network, or any other internal failures or deficiencies in our own systems or those of any custodian or other third party provider we may use, could, in each case, materially and adversely affect our operations. In addition, cryptocurrencies and blockchain technologies have been, and might in the future be, subject to security breaches, hacking or other malicious activities. Failures in internal controls or key management practices, whether by us or a service provider, could lead to irreversible asset loss or unauthorized transfers. Defaults by counterparties or systemic stress in crypto-asset markets may also pose significant liquidity, settlement, or valuation risks. Any such failure or event could result in reputational harm, significant financial losses, lead customers to discontinue or reduce their use of our services, and result in significant penalties and fines and additional restrictions.

In addition, we may rely on third parties for certain aspects of cryptocurrency offerings and reliance on third parties involves risks. For example, inappropriate access to, theft, destruction or other loss of cryptocurrency assets held by any counterparty we may use, insufficient insurance coverage by us or any such counterparty to reimburse us for all such losses, such counterparty’s failure to maintain effective controls over the custody, asset and settlement services provided to us, such counterparty’s inability to purchase or liquidate cryptocurrency holdings, and defaults on financial or performance obligations by counterparty financial institutions, could materially and adversely affect our financial performance and significantly harm our business.

In addition, we plan to integrate blockchain technology from a third party provider into certain of our products. Any number of technical changes, software upgrades, cybersecurity incidents or other changes to the underlying blockchain networks might occur from time to time, causing incompatibility, technical issues, disruptions or security weaknesses to our products. If we or our third party provider are unable to identify, troubleshoot and resolve any such issues successfully, we might no longer be able to support such products, our customers’ assets might be frozen or lost, the security of our products might be compromised and our platforms and technical infrastructure might be affected, all of which could cause revenue to decline and expose us to potential liability for customer losses.

We recently launched global remittance services between the United States and Mexico, and we expect to expand these and similar services to and between other international locations. We are new to global remittance services and engaging in such services exposes us to numerous risks, including compliance with complex laws and regulations across jurisdictions, and operational risks, each of which could materially and adversely affect our business, results of operations, and financial condition.

We recently launched global remittance services between the United States and Mexico, and we expect to expand these and similar services to and between other international locations. The success of this product depends in part on our ability to provide global remittance services compliantly, efficiently and securely. Global remittance services involve complex regulatory, legal, and compliance requirements, including licensing, anti-money laundering, counter-terrorism financing, economic sanctions, data privacy and cybersecurity, customer disclosure, foreign exchange control laws, and monitoring, examination, and oversight by regulatory agencies across multiple jurisdictions. These frameworks differ significantly between countries and are subject to change, interpretation, and enforcement by various authorities. Failure to maintain compliance, or even the perception of noncompliance, may result in investigations, penalties, restrictions on our operations, or the loss of licenses and banking relationships necessary to provide global remittance services.

Our compliance and regulatory risk related to global remittance services is expected to increase as we expand our operations into additional jurisdictions because the provision of global remittance services is highly regulated, and the requirements vary from jurisdiction to jurisdiction. We are currently working with third-party partners who are licensed to provide global remittance services in the jurisdictions in which we operate and plan to operate. We may, as our global remittance services expand, obtain licenses directly in various jurisdictions. If we become licensed to provide these services by various governmental authorities, we would become subject to extensive financial, operational, and other regulatory requirements to maintain our licenses and conduct business. If our licenses are not renewed or we are denied licenses in additional jurisdictions where we choose to apply for a license, we could be forced to change our business practices or to comply with the requirements of the additional jurisdictions, each of which could require us to bear substantial cost. Further, if we were found by these governmental authorities to be in violation of any applicable laws or regulations required to provide global remittance services, we could be subject to fines, penalties, lawsuits, and enforcement actions; additional compliance requirements; increased regulatory scrutiny of our business; restriction or suspension of our operations; or damage to our reputation or brand. Regulatory requirements are constantly evolving, and we cannot predict whether we will be able to meet changes to existing regulations or the introduction of new regulations without harming our business, financial condition, operating results, and future prospects.

Additionally, global remittance services are subject to higher operational risks, including delays, transaction errors, and fraudulent activities, particularly in regions with less developed financial infrastructure, including settlement timing differences, and exposure to local liquidity constraints which may impact the predictability and profitability of our global remittance services. Political instability, trade restrictions, current or new tax laws, or economic sanctions imposed on certain countries may further restrict our ability to provide global remittance services in specific markets.

Furthermore, we currently rely on a third-party partner to facilitate global remittance services and may rely on additional third-parties in the future. In addition, our third-party partners may rely on local partners for delivery of their services. Any disruption, error, or compliance failure by these partners could lead to financial loss, reputational damage, and customer dissatisfaction, including related to the experience of our members’ recipients. If the experience delivered to a recipient is deemed unsatisfactory for any reason, including if a third-party partner’s processes take longer than expected, members may choose to not use our services in the future and our business could be harmed. Additionally, third-party partners charge fees, which may increase from time to time, and which could increase our costs. Banks currently determine the fees charged for bank-originated transactions and may increase the fees with little prior notice. U.S. federal, state, local or foreign governments could also mandate a tax on global remittance services, or require additional taxes or fees to be imposed upon our customers, or otherwise impact the manner in which we provide global remittance services. If fees increase, it may require us to change our product options, or take other measures that would impact our costs and profitability or cause us to lose members or otherwise limit our operations.

If we are unable to effectively manage these risks or adapt our operations to evolving international regulatory environments, our ability to further expand our global remittance services and similar services, and maintain compliance could be impaired, and our business, financial condition, and results of operations could be materially and adversely affected.