eToro to Shut Down Nearly All Crypto Trading in Settlement With US SEC

eToro has neither admitted nor denied the SEC's findings. The settlement will only affect the company's US users.

By Reuters | Updated: 13 September 2024 19:55 IST

Photo Credit: eToro

eToro was founded in 2007 and is headquartered in Tel Aviv, Israel

Highlights

eToro agreed to settle charges that it operated as an unregistered broker
Going forward, eToro's US customers can trade in BTC, ETH, and BCH
eToro's US users have 180 days to sell all other tokens

Retail trading platform eToro will stop offering nearly all cryptocurrencies to its customers as part of a settlement with the US Securities and Exchange Commission, the regulator said on Thursday.

eToro also agreed to pay a penalty of $1.5 million (roughly Rs. 12.5 crore) to settle charges that it operated as an unregistered broker and unregistered clearing agency in connection with its cryptocurrency offerings.

The SEC alleged that eToro provided its US customers the ability to trade crypto assets that the regulator deemed to be securities since at least 2020, but did not comply with the registration requirements of federal securities laws.

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The company neither admitted nor denied the SEC's findings. The settlement will only affect the company's US users.

In a statement, eToro co-founder and CEO Yoni Assia said that the settlement allows the company to "focus on providing innovative and relevant products across our diversified US business."

"As an early adopter and global pioneer of crypto assets as well as a significant player in regulated securities, it is important for us to be compliant and to work closely with regulators around the world," Assia said.

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Going forward, the only cryptocurrencies eToro customers in the United States will be able to trade on the platform will be Bitcoin, Bitcoin Cash, and Ether. eToro will provide its customers the ability to sell all other tokens for 180 days.

“By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework," said Gurbir Grewal, director of the SEC's division of enforcement, in a statement.

"This resolution not only enhances investor protection, but also offers a pathway for other crypto intermediaries."

The SEC has argued that most cryptocurrency tokens are securities and subject to its registration rules, while many crypto firms have disputed that and accused the regulator of overreach.

The SEC is locked in legal battles with a number of crypto platforms including Coinbase, Binance, and Kraken, all of which argue that crypto assets - unlike stocks and bonds - do not meet the definition of securities.

eToro is weighing an initial public offering in New York or London, Assia told the Financial Times in March. The company had tried to go public through a merger with a blank-check firm in 2021 in a $10.4 billion (roughly Rs. 87,278 crore) deal, but abandoned that deal a year later.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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