The U.S. Securities and Exchange Commission (SEC) has announced that eToro USA LLC has agreed to pay $1.5 million to settle charges related to its online trading platform for operating as an unregistered broker and clearing agency. “eToro has agreed to cease and desist from violating applicable federal securities laws and will limit the crypto assets available for trading,” the U.S. authority stated in its release.
The SEC’s order states that, since at least 2020, eToro operated as a broker and clearing agency by providing U.S. customers with the ability, through its online trading platform, to trade crypto assets that were offered and sold as securities. However, “eToro did not comply with the registration provisions of federal securities laws.”
“By removing tokens offered as investment contracts from its platform, eToro has chosen to comply and operate within our established regulatory framework. This resolution not only enhances investor protection but also provides a path forward for other crypto intermediaries. The $1.5 million penalty reflects eToro’s agreement to cease violations of applicable federal securities laws while continuing its operations in the U.S.,” explained Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
As a result, eToro announced that, from now on and subject to the provisions of the SEC’s order, the only crypto assets U.S. customers will be able to trade on the company’s platform are Bitcoin, Bitcoin Cash, and Ether. eToro publicly stated that it will provide its customers the ability to sell all other crypto assets only for 180 days following the issuance of the SEC’s order.
“This agreement allows us to move forward and focus on delivering innovative and relevant products across our diversified U.S. business. U.S. users can continue trading and investing in stocks, ETFs, options, and the three largest crypto assets,” said Yoni Assia, co-founder and CEO of eToro.
According to the firm’s CEO, the terms of the agreement will have minimal impact on their global business: “Outside of the U.S., eToro users will continue to have access to over 100 crypto assets. As a global, multi-asset trading and investment platform, we continue to see strong growth and remain committed to becoming a public company in the future.”
Assia emphasized that complying with regulations is important for the company, and they work closely with regulators worldwide. “We understand the importance of regulation to protect consumers. We now have a clear regulatory framework for crypto assets in key markets like the UK and Europe, and we believe something similar will soon be established in the U.S. Once that is in place, we will seek to enable the trading of crypto assets that comply with that framework,” the CEO concluded.
