eToro Stops Offering Most Cryptocurrencies Due to SEC Settlement

By Hannah Lang

(Reuters) – Retail trading platform eToro will stop offering nearly all cryptocurrencies to its customers as part of a settlement with the U.S. Securities and Exchange Commission (SEC), the regulator announced on Thursday.

eToro also agreed to pay a $1.5 million penalty to settle charges for operating as an unregistered broker and clearing agency in relation to its cryptocurrency offerings.

The SEC claimed that eToro let its U.S. customers trade crypto assets classified as securities since at least 2020 without meeting federal registration requirements.

The company did not admit or deny the SEC’s findings, and this settlement will exclusively affect its U.S. users.

In a statement, eToro co-founder and CEO Yoni Assia mentioned that the settlement enables the company to “focus on providing innovative and relevant products across our diversified U.S. business.”

“As an early adopter and global pioneer of crypto assets as well as a significant player in regulated securities, it is crucial for us to comply and collaborate closely with global regulators,” said Assia.

Going forward, the only cryptocurrencies available for trading by eToro customers in the United States will be bitcoin, bitcoin cash, and ether. The platform will allow customers to sell all other tokens for a period of 180 days.

Gurbir Grewal, director of the SEC’s division of enforcement, stated, “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.”

The SEC argues that most cryptocurrency tokens are securities and should abide by its registration rules, a stance many crypto firms dispute, alleging regulatory overreach.

The SEC is currently engaged in legal disputes with several crypto platforms, including Coinbase, Binance, and Kraken, which contend that crypto assets differ significantly from traditional securities like stocks and bonds.

eToro is considering an initial public offering in New York or London, according to Assia, who had previously disclosed in March to the Financial Times that the company attempted to go public via a merger with a blank-check firm in 2021 valued at $10.4 billion, but abandoned it a year later.