Popular social trading platform eToro has reached a $1.5 million settlement with the United States Securities and Exchange Commission (SEC). Under the agreement, the company will cease offering trading services for most crypto assets to U.S. customers.
The SEC noted that since 2020, eToro has functioned as a broker and clearing agency by enabling U.S. customers to trade crypto assets classified as securities through its online trading platform. Still, it failed to meet the registration requirements under federal securities laws.
The $1.5 million penalty signifies eToro’s agreement to adhere to federal securities laws as it maintains its U.S. operations, according to the announcement.
eToro Limits Crypto Assets Available for Trading
eToro, without admitting or denying the SEC’s findings, will liquidate any crypto assets classified as securities that cannot be transferred to customers, returning the proceeds to them accordingly.
Under the settlement terms, eToro agreed to restrict the crypto assets available for trading in the U.S. to a limited selection and to comply with federal securities laws moving forward.
The trading platform noted that its U.S. customers could only trade Bitcoin, Bitcoin Cash, and Ether. eToro further stated that affected users will need to sell all other crypto assets within 180 days, starting September 12.
“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.
The SEC’s latest move follows a long line-up of regulatory clampdowns on crypto-focused entities. A recent report confirmed that the financial agency has imposed 11 fines worth $4.68 billion on crypto firms and individuals this year alone. The infamous blockchain project Terraform Labs and its founder, Do Kwon, received the biggest civil penalty, worth about $4.5 billion.
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