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.
Limiting Crypto Offerings
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.
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.
Broad Implications for the Crypto Market
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.
While eToro has decided to limit its crypto offerings in the U.S., it continues to provide a range of services in international markets. For example, eToro recently received approval from the Cyprus Securities and Exchange Commission (CySEC) to offer digital asset services across all European Union member states.
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