Late last week, SoFi Technologies (SOFI 3.69%) announced it's shutting down its crypto trading business. Shares of the banking and fintech company briefly plunged nearly 9% in response, but have since recouped those losses.

Most SoFi crypto clients will have until Dec. 19 to either liquidate or transfer their crypto portfolios to another exchange. For those who opt for the latter, SoFi has teamed with the Blockchain.com crypto exchange to streamline the process.

SoFi was previously known for its genesis as a student loan refinancing company. But it has steadily expanded its financial products in recent years to become a one-stop shop for consumers' every financial need -- from checking, savings, and brokerage accounts, to credit cards, loans, insurance, and even travel. SoFi CEO Anthony Noto even set a longer-term goal of becoming one of the top 10 largest financial institutions in the United States.

But should investors really be concerned over SoFi's decision to remove crypto trading from its offerings? I don't think so.

Crypto is a "nonmaterial component" of SoFi's business

For one, this news shouldn't be entirely surprising.

Consider the primary reason behind SoFi's decision: When SoFi received conditional approval for its national banking charter nearly two years ago, government officials gave it two years to secure the necessary regulatory approvals for the crypto side of its business (with the option of up to three one-year extensions).

SoFi even reminded shareholders of as much when it filed its latest annual report this past March; at the time, the company wrote that while it was working closely with the Federal Reserve "to determine whether there is a path to conform [its] crypto-related activities [to regulatory requirements]," it warned it "may ultimately be forced to wind down such activities in a short period of time."

Indeed, only a few months earlier -- and on the heels of the shocking collapse of crypto exchange FTX late last year -- SoFi had found itself in the crosshairs of several skittish lawmakers, who questioned whether its crypto business was compliant with the mandates of its bank license. Further, they worried SoFi's crypto trading could pose a similar systemic risk to the financial system. SoFi management insisted at the time that its crypto business was compliant with the terms of its banking charter, while also noting cryptocurrency trading remained "a nonmaterial component of [its] business."

More recently, the regulatory acceptance of potential new crypto investment vehicles appears to be reaching a fever pitch, including the presumed impending approval of several spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC). But for SoFi, the upside of maintaining this small component of its overall business clearly wasn't worth risking losing the benefits of its invaluable national bank charter.

What's next for SoFi investors?

SoFi has the option, of course, to eventually dive back into the crypto space in the future. But noting that management didn't mention crypto even once during their recent third-quarter 2023 earnings conference call last month, it seems SoFi is doing just fine without crypto as a meaningful contributor in these early stages of its long-term growth story.

SoFi added a company-record 717,000 new members last quarter, with its total number of members up 47% year over year to 6.9 million. Average products per member also remained steady at 1.5X, and total deposits at SoFi Bank grew 23% sequentially between Q2 and Q3, to $15.7 billion.

More importantly, for the first time in company history each of SoFi's three business segments -- including the lending segment, its technology platform segment (which offers banking-as-a-service solutions), and its financial services segment (think checking, savings, brokerage, and credit card products) -- delivered a positive quarterly contribution profit.

Better yet, SoFi management told investors to expect the company as a whole to reach generally accepted accounting principles (GAAP) net income profitability starting in the (current) fourth quarter of 2023. We'll see whether that remains the case when SoFi releases its final Q4 results in late January or early February. But I suspect it should have little trouble achieving that crucial milestone without the aid of crypto trading.