eToro raises minimum deposit to $1,000 due to overwhelming new user influx, triggering controversy over liquidating user positions again!

The cryptocurrency market has been hot recently, attracting traditional financial investors to enter. However, the mainstream brokerage trading platform eToro seems to be struggling with some issues. Some European users have pointed out that their contracts for difference were maliciously closed, and eToro has also announced an increase in the minimum deposit threshold from the original $200 to $1,000.

Leveraged Crypto Contracts Shut Down Urgently

According to a report from foreign media, a European eToro user received an email notification on January 8th, claiming that if the margin in the leveraged crypto contract CFD is not increased to 100%, the position will be forcibly closed at GMT 21:00 on the same day. The email explained:

Users with deposit balances can add additional margin to maintain their positions, while users with no balance can also choose to close other positions to release funds.

However, some users claim that eToro forcibly closed all cryptocurrency positions, including positions that users attempted to maintain above the liquidation price, just four hours later. Slavko Vesenjak, a lawyer representing digital European eToro users from Slovenia, also pointed out that eToro violated the contract agreed with users:

eToro notified users of the liquidation of all cryptocurrency positions just four hours before, and when users from different time zones woke up, their positions had already been forcibly closed.

According to Amy Butler, Head of Global PR at eToro, the vast majority of users were not affected, and she officially stated:

We are aware of dozens of frustrated users, and we are actively working to resolve this.

Influx of New Users Overwhelms the Platform

The day after the liquidation incident, on January 9th, eToro announced that the minimum deposit threshold would be raised:

eToro recently reached an unprecedented number of new users, and to ensure uninterrupted service for its existing 17 million users, we have temporarily raised the minimum deposit amount for new users to $1,000.

.@eToro has seen an unprecedented demand for our services from new users. To manage demand & ensure our existing community of 17M registered users can continue to access our services uninterrupted, we have temporarily increased the minimum deposit amount for new users to $1,000.

— Ask eToro Team (@eToroTeam) January 8, 2021

Butler stated that the increase in the deposit threshold was due to the surge in demand, and the decision to cancel leveraged trading in the European cryptocurrency market was based on "internal risk management," emphasizing that this was unrelated to the IPO plans.

Although there is no official announcement yet, eToro's Senior Client Manager previously shared a Calcalist article on LinkedIn about eToro's upcoming IPO, which has since been deleted, but CEO Yoni Assia also liked the post. According to the report, eToro may conduct an IPO in the second quarter of 2021.

Following eToro's announcement of the increased deposit threshold, users expressed their complaints in the comments section below the tweet. In fact, most cryptocurrency exchanges have made significant progress in futures contract products in 2020. Previously, we also compiled a list of five exchanges offering cryptocurrency derivatives, and eToro is definitely not the top choice for trading cryptocurrencies.