Solana

Robinhood

Summit

Founded in 2011, <a href="https://www.thestreet.com/crypto/markets/robinhood-reportedly-cut-out-of-blockbuster-spacex-ipo" rel="noopener noreferrer nofollow">SoFi Technologies, Inc.</a> (Nasdaq: SOFI) is an American fintech company that operates as a nationally chartered online bank. It offers personal loans, student loans,&nbsp;auto loans, and credit cards.
The social finance firm went public through a merger with Social Capital Hedosophia Holdings Corp. V, a&nbsp;special-purpose acquisition company (SPAC) backed by the&nbsp;billionaire Chamath Palihapitiya,&nbsp;in 2021.
<figure><img src="https://www.thestreet.com/.image/c_fit%2Ch_800%2Cw_1200/MjIyMzIyNDA5NzAzNzQ0OTYx/gettyimages-950407502.jpg" height="800" width="1199">
 <figcaption>
 Chamath Palihapitiya, co-founder and chief executive officer of Social+Capital Partnership LLC, speaks at the 23rd annual Sohn Investment Conference in New York, U.S., on Monday, April 23, 2018.
 </figcaption>
</figure>
In November last year, it <a href="https://www.thestreet.com/crypto/business/sofi-becomes-first-u-s-national-bank-to-offer-crypto-trading" rel="noopener noreferrer nofollow">became</a> the&nbsp;first nationally chartered bank in the U.S. to launch cryptocurrency trading for retail customers. The service allows users to trade cryptocurrencies like&nbsp;<a href="https://www.thestreet.com/crypto/bitcoin" rel="noopener noreferrer nofollow">Bitcoin</a> (BTC), <a href="https://www.thestreet.com/crypto/ethereum" rel="noopener noreferrer nofollow">Ethereum</a> (ETH) and <a href="https://www.thestreet.com/crypto/solana" rel="noopener noreferrer nofollow">Solana</a> (SOL)&nbsp;within the same app they use for banking, borrowing and investing.
In December, SoFi launched&nbsp;a U.S. dollar stablecoin, SoFiUSD.
The company's stock has performed well over the last year, gaining more than 25% of value during the period. But it recently became the target of a popular short-seller.
<h3 id="more-on-chamath-palihapitiya">More on Chamath Palihapitiya:</h3>
<ul>
 <li><a href="https://www.thestreet.com/crypto/markets/billionaire-chamath-palihapitiya-drops-a-banger-says-wall-street-backs-his-spac-comeback" rel="noopener noreferrer nofollow">Billionaire Chamath Palihapitiya hints at new SPAC despite community backlash</a></li>
 <li><a href="https://www.thestreet.com/crypto/markets/tech-billionaires-13-year-old-forecast-turns-out-to-be-a-goldmine" rel="noopener noreferrer nofollow">Tech billionaire's 13-year-old forecast turns out to be a goldmine</a></li>
 <li><a href="https://www.thestreet.com/crypto/markets/billionaire-chamath-palihapitiya-has-a-blunt-warning-about-quantum-computing" rel="noopener noreferrer nofollow">Billionaire Chamath Palihapitiya has a blunt warning about quantum computing</a></li>
</ul>
<h2 id="short-seller-goes-after-sofi-technologies">Short-seller goes after SoFi Technologies</h2>
Muddy Waters Research, the&nbsp;investment research firm known for short selling, <a href="https://muddywatersresearch.com/research/2026/mw-short-0317/" rel="noopener noreferrer nofollow">released</a> a report on March 17 and called SoFi Technologies&nbsp;a "financial engineering treadmill, not a healthily growing origination business."
The short-seller disclosed a short position in SoFi and accused the fintech firm&nbsp;of&nbsp;improper accounting practices. SoFi&nbsp;shareholders may be facing ongoing dilution as the management can meet bonus targets&nbsp;tied to loan valuations and off-balance-sheet structures that disguise borrowings as revenue, Muddy Waters claimed in the 28-page report.
There were more allegatory claims in the report:
<ul>
 <li>SoFI seems to have a material misstatement of at least $312 million of unrecorded debt and there is a possibility of the company having made "more extensive" misstatements that Muddy Waters hadn't detected.</li>
 <li>SoFI’s personal loan charge-off rate is approximately 6.1%, not 2.89% as SoFi claims.</li>
 <li>SoFi’s student loan segment exists&nbsp;primarily&nbsp;to generate fair value gains for management bonuses.</li>
 <li>SoFI’s secured loan business is a seller-financed whole loan sales program.</li>
 <li>SoFi's 2025 Adjusted EBITDA is inflated by approximately 90%.</li>
</ul>
<blockquote>
 "Management effectively gets paid for diluting shareholders,"&nbsp;Muddy Waters claimed about SoFi Technologies.
</blockquote>
<a href="https://www.thestreet.com/crypto/business/sofi-becomes-first-u-s-national-bank-to-offer-crypto-trading" rel="noopener noreferrer nofollow">Related: SoFi becomes first U.S. national bank to offer crypto trading</a>
<h2 id="sofi-denies-short-seller-s-claims">SoFi denies short-seller's claims&nbsp;</h2>
SoFi Technologies <a href="https://www.businesswire.com/news/home/20260317128099/en/SoFi-Responds-to-Inaccurate-Short-Seller-Report" rel="noopener noreferrer nofollow">called</a> the&nbsp;report "factually inaccurate and misleading" and said it&nbsp;may explore legal action against Muddy Waters.
The short-seller responded, "Muddy Waters has been sued a number of times. We're undefeated."
On the day the short-seller released the report, the SoFi stock didn't suffer any decline and remained rather flat. It closed at $17.27 on March 17.
<figure>
 <figcaption>Anthony Noto, chief executive officer of SoFi Technologies Inc., speaks during the Trump Accounts Launch Summit in Washington, DC, US, on Wednesday, Jan. 28, 2026.
 </figcaption>
</figure>
In fact,&nbsp;SoFi&nbsp;CEO Anthony Noto <a href="https://www.investors.com/news/technology/sofi-stock-company-fires-back-muddy-waters-ceo-buys-shares/" rel="noopener noreferrer nofollow">bought</a>&nbsp;28,900 shares worth approximately $500,000 following the short-seller's report to demonstrate his confidence in his company.
Muddy Waters <a href="https://muddywatersresearch.com/wp-content/uploads/2026/03/MWR_SOFI_11QUESTIONS_0200321.pdf" rel="noopener noreferrer nofollow">said</a> on March 22 that SOFI’s response didn't address a single factual claim.
<h2 id="analyst-defends-sofi">Analyst defends SoFi</h2>
Mizuho analyst Dan Dolev defended SoFi Technologies against Muddy Waters' claims, <a href="https://in.investing.com/news/stock-market-news/sofi-defended-at-mizuho-following-short-seller-claims-93CH-5304646" rel="noopener noreferrer nofollow">Investing.com reported</a> on March 24.
Though the report has&nbsp;an impressive amount of detail and analysis,&nbsp;Dolev said the claims could likely be refuted using SoFi’s public disclosures.&nbsp;Mizuho maintained an Outperform rating on SoFi and a stock price target of&nbsp;$38.
Since March 17, the SOFI stock has declined 15%. It was trading at $15 at the time of writing, down 1.5% in a day.
TheStreet <a href="https://roundtable.rtb.io/" rel="noopener noreferrer nofollow">Roundtable</a>reached out to both Muddy Waters and SoFi Technologies for comments but did not receive any response by the time of publication.
<a href="https://www.thestreet.com/crypto/markets/robinhood-reportedly-cut-out-of-blockbuster-spacex-ipo" rel="noopener noreferrer nofollow">Related: Robinhood reportedly cut out of blockbuster SpaceX IPO</a>

Famous short seller targets crypto-friendly bank in new report

Table of Contents

TheStreet Roundtable

Other articles published on Mar 30, 2026

Join our free newsletter for daily crypto updates!