Crypto trading platform eToro reached a settlement with the U.S. Securities and Exchange Commission (SEC), significantly reducing its crypto offerings for U.S. customers.
Details of the Settlement
As part of the agreement, eToro will now only offer trading in three cryptocurrencies—Bitcoin (BTC), Ethereum (ETH), and Bitcoin Cash (BCH). This decision comes after the SEC accused eToro of operating as an unregistered broker and clearing agency, facilitating the trading of crypto assets that the SEC considers securities. eToro has also agreed to pay a $1.5 million penalty as part of the settlement, signaling its commitment to resolving the SEC’s claims without admitting or denying the allegations.
Deadline for US Users
Under the terms of the SEC settlement, eToro will offboard all crypto assets except BTC, ETH, and BCH within the next 187 days. U.S. users will have 180 days to sell or liquidate their holdings in other cryptocurrencies before their access to these assets is restricted. Any remaining assets after this window will be liquidated, and users will receive proceeds equivalent to their account balances.
SEC’s Position on Cryptocurrencies
The SEC's actions against eToro are part of a larger campaign to regulate the crypto space. The settlement suggests the SEC sees most cryptocurrencies beyond Bitcoin, Ethereum, and Bitcoin Cash as securities. This follows a similar pattern to earlier actions taken by the SEC against Ripple and other crypto projects. In 2020, following the SEC's lawsuit against Ripple, eToro delisted XRP and three other cryptocurrencies. eToro’s settlement with the SEC may prompt other crypto platforms to rethink their U.S. operations. Major players like Coinbase, Binance, and Kraken are already entangled in legal battles with the SEC, contesting the regulator’s stance that most cryptocurrencies are securities. These exchanges argue that digital assets do not meet the traditional definition of securities, and the outcome of these cases could reshape the entire crypto industry in the U.S.
eToro’s decision to limit its crypto offerings in the U.S. is part of its strategy to comply with existing regulations and work with regulators to ensure secure and compliant services for its users.
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