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eToro agrees to pay $1.5 million to settle with SEC, U.S. customers will only be able to trade BTC, BCH, and ETH

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eToro agrees to pay $1.5 million to settle with SEC, U.S. customers will only be able to trade BTC, BCH, and ETH

The U.S. Securities and Exchange Commission (SEC) announced on Thursday that it has reached a settlement with the fintech trading platform eToro. The U.S. subsidiary of eToro (eToro USA LLC) has agreed to pay $1.5 million and is prohibited from allowing U.S. customers to trade most cryptocurrencies on its platform, with the exception of Bitcoin, Bitcoin Cash, and Ethereum.

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eToro is an Israeli fintech company that offers social trading services and a wide range of trading instruments, attracting young investors from around the world to its platform. According to information on its website, the platform offers over 6,000 assets and has a user base of 30 million. In February of last year, eToro also obtained the New York BitLicense and money transfer license.

The SEC found that since 2020, eToro has been operating as a broker and dealer, providing trading of digital assets to U.S. customers through its online trading platform, many of which are considered securities. However, eToro failed to comply with the registration requirements of federal securities laws. eToro USA LLC has agreed to pay a $1.5 million settlement.

In the future, the only cryptocurrencies that U.S. customers can trade on eToro will be Bitcoin (BTC), Bitcoin Cash (BCH), and Ethereum (ETH). U.S. customers are required to sell off other digital assets within 180 days.

Gurbir S. Grewal, Director of the SEC's Enforcement Division, stated:

$1.5 million in penalties reflects eToro's agreement to continue its operations in the U.S. while ceasing its violations of applicable federal securities laws. The resolution not only strengthens investor protection but also provides a path for other cryptocurrency intermediaries.

Currently, eToro's website still lists over 70 cryptocurrencies, including XRP, Solana, and BNB.

Robinhood Crypto, the cryptocurrency division of U.S. online brokerage Robinhood, also received a Wells Notice from the SEC in early May. The notice indicates that SEC staff have preliminarily decided to take enforcement action against the company, accusing it of violating securities regulations.