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EToro Reaches $1.5M SEC Settlement, Agrees to Stop Trading Most Cryptocurrencies
By Camomile Shumba,
1 days ago
Trading platform eToro agreed to pay $1.5 million to settle SEC charges it facilitated trading certain crypto assets as securities, though the specific tokens weren't detailed in the order.
The company will make only a limited set of crypto assets available for trading.
Only about 3% of customers' crypto assets be dollar value are affected, eToro said.
Trading platform eToro agreed to pay $1.5 million to settle charges it operated an unregistered broker, an unregistered clearing agency and facilitated trading certain crypto assets as securities, the U.S. Securities and Exchange Commission said in a statement on Thursday.
The company "has agreed to cease and desist from violating the applicable federal securities laws and will make only a limited set of crypto assets available for trading," the statement said, though eToro pointed out the restrictions affect only an estimated 3% of customer's cryptocurrencies by dollar value.
Going forward the only crypto assets available for U.S. customers to trade on the company’s platform will be bitcoin {{BTC}}, bitcoin cash (BCH) and ether {{ETH}}, the SEC statement said.
However, "in most cases U.S. users don't have to do anything," an eToro spokesperson said. "Only positions that cannot be transferred to the eToro crypto wallet are impacted."
Positions in coins which are redeemable to the eToro crypto wallet can remain as open positions, so no action is required for these assets, the spokesperson added.
“This settlement allows us to move forward and focus on providing innovative and relevant products across our diversified U.S. business," Yoni Assia, eToro’s Co-founder and CEO told CoinDesk in an earlier press release.
The SEC’s order found that since at least 2020, eToro – which didn't admit or deny wrongdoing in agreeing to the settlement – let U.S. customers trade crypto assets being offered and sold as securities and "did not comply with the registration provisions of the federal securities laws," the release said.
The eToro case notably doesn't specify what tokens the company was handling that it considers securities. The agency has done so in several past matters, but it hasn't offered a formal, crypto-specific definition for what tokens stray into the SEC's jurisdiction – the primary point of legal contention between the regulator and the industry.
The SEC has been clamping down on crypto firms that it argues have violated securities laws. It recently was granted a limited win in its several-years-long case against crypto platform Ripple that dates back to 2020.
The SEC also brought an enforcement action against crypto exchange Coinbase Inc. (COIN) for "alleging that Coinbase intermediated transactions in crypto-asset securities on its trading platform and through related services, all in violation of the federal securities laws." The court sided with the SEC, according to a filing in March .
"We now have a clear regulatory framework for crypto assets in our home markets of the U.K. and Europe and we believe we will see similar in the U.S. in the near future," Assia added. "Once this is in place, we will look to enable trading in the crypto assets that meet this framework.”
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