eToro to Cease Most Crypto Trading in $1.5M Settlement with SEC
Retail trading platform eToro has agreed to halt nearly all cryptocurrency trading for its U.S. customers as part of a settlement with the U.S. Securities and Exchange Commission (SEC). The settlement also includes a $1.5 million penalty, marking a significant shift in the platform’s operations and regulatory compliance.
The SEC had charged eToro with operating as an unregistered broker and clearing agency in relation to its cryptocurrency offerings. The regulator alleged that eToro allowed U.S. customers to trade crypto assets deemed to be securities without meeting the registration requirements of federal securities laws.
In response to the settlement, eToro has committed to discontinuing trading for most cryptocurrencies, leaving only Bitcoin, Bitcoin Cash, and Ether available for transactions on its platform. Customers will have a 180-day period to sell any other tokens they hold before the assets are removed from the platform.
eToro co-founder and CEO Yoni Assia stated that the settlement provides an opportunity for the company to “focus on providing innovative and relevant products across our diversified U.S. business.” Assia emphasized the company’s commitment to regulatory compliance and its role as a pioneer in the crypto space.
Gurbir Grewal, director of the SEC’s division of enforcement, welcomed the resolution, noting that it “enhances investor protection” and sets a precedent for other crypto intermediaries. The SEC’s stance is that many cryptocurrency tokens are securities and must adhere to registration rules, a position that has faced criticism and legal challenges from various crypto firms.
The SEC is currently engaged in legal disputes with other major crypto platforms, including Coinbase, Binance, and Kraken. These firms argue that cryptocurrencies do not meet the traditional definition of securities and have pushed back against what they see as regulatory overreach.
As the regulatory landscape for cryptocurrencies continues to evolve, eToro’s settlement represents a significant moment in the ongoing debate over how digital assets should be regulated in the U.S. financial system.