Trading platform eToro recently announced that it will be halting trading for most digital assets on its platform following a $1.5 million settlement with the US Securities and Exchange Commission (SEC). This decision comes after the SEC’s investigation revealed that eToro allowed US customers to trade crypto assets considered securities without complying with federal registration requirements since 2020.
As part of the settlement, eToro has agreed to restrict its crypto offerings to a select few assets, including Bitcoin, Bitcoin Cash, and Ethereum. The $1.5 million fine imposed on eToro reflects the company’s commitment to halting its violations of federal securities laws while still operating in the US, according to Gurbir S. Grewal, SEC Director of Enforcement.
Grewal stated, “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.”
Under the terms of the agreement, eToro must liquidate all other digital assets within 180 days. This move is part of the SEC’s broader regulatory crackdown on various crypto-related firms, including Binance, Kraken, and Coinbase. The regulator has also hinted at potential legal actions against Robinhood and the NFT marketplace OpenSea.
In response to the settlement, eToro co-founder and CEO Yoni Assia expressed his commitment to compliance and working closely with regulators worldwide. He mentioned that the company looks forward to enabling trading in crypto assets that meet the regulatory framework in the US once it is established.
eToro has provided its users with a deadline for closing their crypto positions or transferring supported coins to the eToro wallet by March 11, 2025. Any remaining crypto positions, except for those on BTC, BCH, ETH, or unsupported coins, will be sold by March 18, 2025, with the proceeds credited to users’ cash balances in their investment accounts.
eToro assured users that only positions that cannot be transferred to the wallet will be liquidated on March 18, 2025, representing less than 3% of the total dollar value of US customers’ crypto assets. This move aims to ensure compliance with regulatory requirements and protect investors in the evolving cryptocurrency landscape.