eToro and the U.S. Securities and Exchange Commission came to a $1.5 million settlement in response to accusations of breaking federal securities laws.
In a deal made public by the SEC, eToro also committed to stop almost all cryptocurrency trading and transactions for clients in the United States.
From now on, American users can only trade Ethereum, Bitcoin Cash, and Bitcoin on the site. The trading platform has 187 days to offboard all other cryptocurrencies and sell its current holdings by the order imposed on September 12.
Proceeds will be given to customers in line with their balance. According to the SEC’s complaint, eToro has been operating a clearing agency and broker without a license since at least 2020.
Despite the exchange and the SEC settling, the exchange refused to acknowledge or refute the SEC’s claims.
The enforcement division head of the SEC, Gurbir S. Grewal, stated that eToro’s collaboration opens up a method for other cryptocurrency middlemen to abide by U.S. regulations. Gurbi S. Grewal, director of the SEC’s enforcement division:
By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework… The $1.5 million penalty reflects eToro’s agreement to cease violating applicable federal securities laws as it continues its U.S. operations.”
Although the platform did not discuss whether cryptocurrencies are secure, the settlement could serve as a model for similar lawsuits in the future.
Distinguishing Bitcoin, Ethereum, and BCH from other cryptocurrencies implies that the SEC considers the majority, if not all, of other digital assets to be securities.
Some service providers support this opinion based on EToro’s previous choices. eToro delisted (XRP) and three other cryptocurrencies in 2020 in reaction to the SEC’s lawsuit against Ripple.
The business’s cryptocurrency services did, however, continue in other markets. As previously mentioned, the company has CySEC CASP approval to provide digital asset facilities within the European Union.
In the meantime, a broad crackdown by the SEC and other American regulatory watchdogs was maintained on the developing blockchain industry. Since 2013, the SEC has fined cryptocurrency firms more than $7.4 billion.
