Within the next six months, the United States arm of the financial services company, eToro, would cease trading almost all crypto assets on its platform due to a new order from the Securities and Exchange Commission (SEC).
According to a press release from the SEC, eToro has violated federal securities laws since at least 2020. As a result, the exchange would pay a fine of $1.5 million and make a limited set of cryptocurrencies available for trading.
SEC Announces Settlement With eToro
The SEC accused eToro of operating as an unregistered broker and clearing agency and facilitating the buying and selling of crypto assets as securities on its online trading platform. While the exchange offered these services, it failed to comply with the registration provisions of the federal securities laws.
In line with the settlement, eToro has agreed to cease violating federal securities laws. Henceforth, the exchange will only offer Bitcoin (BTC), Bitcoin Cash (BCH), and Ether (ETH) to its users.
Following the SEC’s order, eToro’s customers have only 180 days to sell other assets that are to be eliminated from the platform, or the exchange will liquidate the cryptocurrencies and return the proceeds to users. The SEC said the online trading platform neither admitted nor denied the allegations but just agreed with the settlement.
“By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework. This resolution not only enhances investor protection, but also offers a pathway for other crypto intermediaries. The $1.5 million penalty reflects eToro’s agreement to cease violating applicable federal securities laws as it continues its U.S. operations,” said Gurbir Grewal, Director of the SEC’s Division of Enforcement.
More Regulatory Issues
Over the past few years, eToro has taken steps to remain compliant with the SEC’s laws. In June 2023, the exchange imposed restrictions on several crypto assets classified as securities in the agency’s lawsuits against rival trading platforms Coinbase and Binance.
The assets include Algorand (ALGO), Decentraland (MANA), Dash (DASH), and Polygon (MATIC). Notably, the firm had already delisted Ripple (XRP), Cardano (ADA), and Tron (TRX) for several reasons in the months prior.
Meanwhile, eToro is not just facing regulatory heat from the SEC; the Australian Securities and Investments Commission sued the platform last month for harming investors through its products.
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