eToro, a social trading and financial investment platform, has agreed to halt nearly all trading in cryptocurrency assets following a court case with the U.S. Securities and Exchange Commission (SEC).
According to the SEC report on Thursday (Sep. 12), eToro has agreed to pay $1.5 million to settle charges that the company operated an unregistered broker linked to the trading platform that allowed users to buy and sell crypto assets as securities.
The company has limited the crypto assets it will make available and has agreed to cease any further breach of regulatory standards. Bitcoin, Bitcoin Cash, and Ethereum owners in the United States will now be heavily restricted via eToro.
eToro scale back crypto options as a result of SEC case
The SEC investigation alleged that eToro offered U.S. customers the option to trade crypto assets being presented and sold as securities via its online trading platform. The crux of the issue is that eToro acted as a broker and clearing agency but allegedly did not follow the registration provisions set out in federal securities laws.
“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,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
eToro’s X account stated, “As a company serving over 38M registered users from more than 75 countries, the terms of the eToro US LLC settlement will have a minimal impact on eToro’s global business.”
An update from eToro regarding our settlement with the SEC – *impact on US users only*:
As a company serving over 38M registered users from more than 75 countries, the terms of the eToro US LLC settlement will have a minimal impact on eToro’s global business.Outside of the…
— eToro (@eToro) September 12, 2024
eToro published a statement about the decision and stated they will undertake the following actions:
- From September 11, 2024 eToro users based in the United States are only able to open (buy) new crypto positions in BTC, BCH, and ETH. It is not possible to open new positions in any other cryptoassets.
- From March 11, 2025 users will only be able to close (sell) crypto positions in BTC, BCH and ETH.
- Prior to March 11, 2025 users can close their cryptoasset positions or transfer their crypto holdings to the eToro Wallet for coins which are supported. You can find a list of supported cryptoassets here.
- On March 18, 2025 any remaining open positions in cryptoassets other than BTC, BCH and ETH and those not supported by the wallet at the time will be liquidated and the proceeds transferred to users’ available cash balance in their investment accounts.
Image: Pixlr.
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