The SEC accused eToro of trading crypto assets classified as securities without following federal registration rules.
SEC Accusation
The SEC’s findings state that since at least 2020, eToro provided U.S. customers the ability to trade crypto assets deemed to be securities via its platform, without complying with the necessary registration laws. By failing to register as a broker or clearing agency, eToro violated federal securities regulations.
Consequences for eToro
In compliance with the SEC’s order, eToro has agreed to halt trading for all crypto assets aside from Bitcoin, Bitcoin Cash, and Ether. Customers have 180 days to sell other crypto assets on eToro before they are removed. After this period, any remaining assets classified as securities will be liquidated, with proceeds returned to customers.
SEC Director's Statement
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated: “This resolution enhances investor protection and offers a pathway for other crypto intermediaries”. He emphasized that the $1.5 million penalty reflects eToro’s commitment to ceasing its violations of federal securities laws.
While eToro has neither admitted nor denied the SEC’s findings, it has agreed to comply with the cease-and-desist order and liquidate any untransferable crypto assets classified as securities within 187 days. The company will return the proceeds from these liquidations to affected customers.
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