- eToro will halt trading for most cryptocurrencies after settling with the U.S. SEC, agreeing to pay a $1.5 million penalty.
- The SEC accused eToro of operating as an unregistered broker and clearing agency for crypto assets classified as securities.
eToro will halt trading for most cryptocurrencies after settling with the U.S. SEC, agreeing to pay a $1.5 million penalty.
The SEC accused eToro of operating as an unregistered broker and clearing agency for crypto assets classified as securities.
In a significant regulatory move, the stock trading platform eToro is set to halt trading for nearly all cryptocurrencies following a settlement with the U.S. Securities and Exchange Commission (SEC). The SEC announced that eToro USA LLC has agreed to pay a $1.5 million penalty to resolve charges alleging that it operated as an unregistered broker and clearing agency in connection with its crypto trading services.
This settlement stems from eToro’s facilitation of trading in certain crypto assets classified as securities without the required registration. According to the SEC’s press release, eToro had been acting as both a broker and clearing agency since at least 2020, providing U.S. customers with access to trade crypto assets that were offered and sold as securities.
However, the platform failed to adhere to the federal securities laws governing such activities. As part of the settlement, eToro will cease its violations of these laws and limit its crypto offerings to only a select few assets. U.S. customers will now be able to trade Bitcoin, Bitcoin Cash, and Ether on the platform. Additionally, the platform will allow the liquidation of other crypto assets for 180 days following the SEC’s order.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, commented on the settlement, stating that the platform’s decision to remove investment contract tokens from its platform aligns with regulatory expectations and enhances investor protection. The fine, he added, reflects the platform’s commitment to cease its legal infractions while continuing operations in the U.S. market.
eToro’s Regulatory Troubles in the Philippines
This settlement marks yet another regulatory challenge for the platform. Earlier this year, the Philippines SEC accused it of offering unregistered securities in the country. According to the Philippines SEC, the platform was not registered as a corporation and lacked the necessary licenses to engage in securities trading or operate as a broker or dealer.
The SEC in the Philippines warned the public to exercise caution when dealing with unregistered online investment platforms, highlighting the potential legal consequences for those promoting or endorsing such platforms.
As the platform adjusts its operations to comply with both U.S. and international regulations, the broader implications for the cryptocurrency trading landscape remain significant. This development underscores the increasing scrutiny and regulatory challenges facing digital asset platforms as they navigate the evolving financial regulatory environment.
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