In a significant development for the cryptocurrency market, eToro USA LLC has reached a settlement with the U.S. Securities and Exchange Commission (SEC). The settlement involves eToro paying a $1.5 million fine and agreeing to cease trading most crypto assets in the United States. This decision marks a pivotal moment for both eToro and its U.S. customers, as the platform will now limit trading to only Bitcoin, Bitcoin Cash, and Ethereum.

The SEC’s Charges

The SEC charged eToro with operating as an unregistered broker and clearing agency. According to the SEC, eToro facilitated the buying and selling of certain crypto assets that were considered securities without proper registration. This violation of federal securities laws prompted the regulatory body to take action, leading to the settlement agreement.

Terms of the Settlement

Without admitting or denying the SEC’s findings, eToro agreed to the following terms:

• Payment of a $1.5 million penalty.
• A cease-and-desist order to stop violating federal securities laws.
• Discontinuation of trading in most crypto assets, limiting U.S. customers to Bitcoin, Bitcoin Cash, and Ethereum.

Additionally, eToro has 180 days to liquidate any crypto assets that are considered securities and return the proceeds to the respective customers.

Impact on U.S. Customers

For U.S. customers, this settlement means a significant reduction in the variety of crypto assets available for trading on eToro. While Bitcoin, Bitcoin Cash, and Ethereum remain accessible, other popular cryptocurrencies will no longer be available. This move aims to ensure compliance with U.S. regulations and protect investors from potential risks associated with unregistered securities.

eToro’s Response

Yoni Assia, eToro’s Co-founder and CEO, expressed optimism about the settlement, stating, “This settlement allows us to move forward and focus on providing innovative and relevant products across our diversified U.S. business”. The company aims to continue its mission of offering a robust trading platform while adhering to regulatory standards.

Looking Ahead

The settlement with the SEC is a reminder of the evolving regulatory landscape for cryptocurrency trading in the United States. As regulators continue to scrutinize the market, platforms like eToro are trying hard to navigate these challenges to ensure compliance and maintain trust with their users.

For now, U.S. customers can continue to trade Bitcoin, Bitcoin Cash, and Ethereum on eToro, while the platform works towards meeting regulatory requirements and exploring new opportunities in the crypto space.

Source:

https://www.sec.gov/newsroom/press-releases/2024-125