eToro US Pulls Back on Crypto Trading After SEC Settlement

• According to the SEC, eToro operated as an unregistered broker.
• eToro agreed to pay $1.5 million to settle charges, without admitting or denying the SEC’s findings.
• eToro will only be listing Bitcoin, Bitcoin Cash, and Ethereum for U.S. customers.

Trading platform eToro is set to withdraw a majority of its crypto asset offerings, following a settlement with the U.S. Securities and Exchange Commission (SEC) and has agreed to pay $1.5 million to wrap up the charges.

eToro Comes Into Compliance

According to the SEC’s Sept. 12 press release , eToro was alleged to be operating as an “unregistered broker and unregistered clearing agency” due to its sale of “certain crypto assets” as securities.

The SEC’s order ruled that since “at least 2020,” eToro sold and traded cryptocurrencies as securities and didn’t comply with certain federal securities laws.

As a result, eToro will be limiting its offerings to certain cryptocurrencies for U.S. customers, namely Bitcoin (BTC), Bitcoin Cash (BCH), and Ethereum (ETH):

“By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework.”

Interestingly, the trading firm agreed to pay the $1.5 million without admitting or denying the SEC’s findings, a move similar to the recent settlement between Uniswap and the U.S. Commodity Futures Trading Commission (CFTC).

“The $1.5 million penalty reflects eToro’s agreement to cease violating applicable federal securities laws as it continues its U.S. operations,” the release reads.

180 Days to Liquidate Crypto Assets

As per the release, eToro customers will have 180 days following the SEC’s order to sell their remaining crypto assets.

The platform itself has 187 days within the issuance of the order to liquidate the remaining crypto assets that eToro “[…] is unable to transfer to its customers, and return the proceeds to the respective customers.”

The ruling could set a precedent for trading platforms and crypto intermediaries going forward. This could spell good news for Uniswap, Coinbase, and other crypto firms in the SEC’s crosshairs.

About the Author

Eddie Mitchell

Eddie has been writing news and content primarily for crypto news and industry players over the past seven years. With an eye for the bigger picture, Eddie prefers to investigate the broader implications of a story, as well as explore the weird and wonderful world of crypto. He believes blockchain has already changed the world, but observes the space overall with a skeptical and adoring eye.

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