Trading platform eToro will suspend trading of most digital assets on its platform following a $1.5 million settlement with the U.S. Securities and Exchange Commission (SEC), according to a Sept. 12 statement.
The SEC investigation found that since 2020, eToro has allowed U.S. customers to trade crypto assets that are considered securities without complying with federal registration requirements.
While eToro has neither admitted nor denied the SEC’s allegations, it has agreed to limit its cryptocurrency offerings to a few assets, including Bitcoin, Bitcoin Cash, and Ethereum.
SEC Enforcement Director Gurbir S. Grewal noted that the $1.5 million fine reflects eToro’s commitment to ending its violations of federal securities laws while continuing its operations in the United States.
He said:
“By removing tokens offered as investment contracts from its platform, eToro has chosen to comply and operate within the established regulatory framework. This resolution not only strengthens investor protection, but also provides a path forward for other crypto intermediaries.”
As part of the agreement, eToro must liquidate all remaining digital assets within 180 days.
The move comes as part of a broader regulatory crackdown by the SEC on several cryptocurrency-related companies, including Binance, Kraken and Coinbase. The regulator also hinted at legal action against Robinhood and NFT marketplace OpenSea, with the release of a Wells notice.
eToro’s response
Yoni Assia, co-founder and CEO of eToro, said the deal allows the company to move forward and focus on offering innovative products across its U.S. operations.
He highlighted the company’s commitment to compliance, saying:
“It is important for us to comply with regulations and work closely with regulators around the world. We now have a clear regulatory framework for crypto assets in the UK and Europe and we believe we will see a similar framework in the US in the near future. Once this framework is in place, we will look to enable trading of crypto assets that meet this framework.”
Meanwhile, eToro said its users can either close their crypto positions or transfer supported coins to the eToro Wallet before March 11, 2025.
By March 18, 2025, all remaining crypto positions, except those in BTC, BCH, ETH or unsupported coins, will be sold and the proceeds will be credited to users’ cash balances in their investment accounts.
He added:
“Only positions that cannot be transferred to the wallet will be liquidated on March 18, 2025. This represents less than 3% of the total dollar value of crypto assets of US customers.”
