eToro Settles with SEC, Drastically Reduces Crypto Offerings in U.S.
Online trading platform eToro has reached a settlement with the U.S. Securities and Exchange Commission (SEC), agreeing to pay a $1.5 million penalty and significantly limit its cryptocurrency offerings to U.S. customers. The agreement, announced on September 12, 2024, comes as a result of SEC charges that eToro operated as an unregistered broker and clearing agency for crypto trading.
Under the terms of the settlement, eToro will restrict U.S. customers to trading only three cryptocurrencies: Bitcoin, Bitcoin Cash, and Ether. This move represents a dramatic reduction from the platform’s previous offering of over 70 digital assets to U.S. users.
The SEC’s order states that eToro has operated as a broker and clearing agency since at least 2020, facilitating the buying and selling of crypto assets that the regulator considers securities. Without admitting or denying the SEC’s findings, eToro agreed to cease and desist from violating applicable federal securities laws.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, commented on the settlement: “By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework. This resolution not only enhances investor protection but also offers a pathway for other crypto intermediaries.”
eToro will provide U.S. customers with a 180-day window to sell their positions in cryptocurrencies other than Bitcoin, Bitcoin Cash, and Ether. After this period, the company will liquidate any remaining positions in these assets and return the proceeds to customers.
Despite the significant changes to its U.S. operations, eToro’s Co-founder and CEO, Yoni Assia, stated that the settlement would have a minimal impact on the company’s global business. “Outside of the United States, eToro users will continue to enjoy access to over 100 crypto assets,” Assia said in a statement.
This settlement is part of a broader trend of increased regulatory scrutiny in the cryptocurrency space. The SEC has been actively pursuing enforcement actions against various crypto firms, including major exchanges like Binance and Coinbase.
The eToro case is particularly notable as it may set a precedent for how other multi-asset trading platforms approach cryptocurrency offerings in the United States. It also highlights the ongoing debate surrounding the classification of digital assets as securities.
