Retail trading platform eToro has agreed to stop offering nearly all cryptocurrencies to its customers in the U.S. as part of a settlement with the Securities and Exchange Commission (SEC). The SEC alleged that eToro operated as an unregistered broker and unregistered clearing agency in connection with its cryptocurrency offerings. As part of the settlement, eToro will pay a penalty of $1.5 million and focus on providing innovative products to its U.S. customers.
eToro will now only offer bitcoin, bitcoin cash, and ether for trading on its platform in the U.S. Customers will have the ability to sell all other tokens for a period of 180 days. The SEC’s director of enforcement, Gurbir Grewal, praised eToro for its compliance with established regulatory frameworks, stating that the resolution enhances investor protection and offers a pathway for other crypto intermediaries to follow suit.
While the SEC considers most cryptocurrency tokens to be securities subject to registration rules, many crypto firms have disputed this classification, accusing the regulator of overreach. The SEC is currently engaged in legal battles with several prominent crypto platforms, including Coinbase, Binance, and Kraken, over the classification of crypto assets as securities.
eToro’s co-founder and CEO, Yoni Assia, emphasized the company’s commitment to compliance and working closely with regulators around the world. In a statement, Assia stated that eToro is a pioneer in the cryptoasset space and a significant player in regulated securities, highlighting the importance of being compliant in the evolving regulatory landscape.
Looking ahead, eToro is considering an initial public offering in New York or London. In March, Assia revealed the company’s plans for an IPO after a failed merger with a blank-check firm in 2021. As eToro navigates the changing regulatory environment and focuses on compliance, the company aims to provide a diverse range of products to its U.S. customers while adhering to regulatory guidelines.
