- Traders can still buy and sell Ether, Bitcoin, and Bitcoin Cash under a $1.5 million deal.
- SEC action signals continue to pursue “unregistered brokers” in the cryptocurrency market.
- Robinhood has also been targeted by the regulator.
The U.S. Securities and Exchange Commission announced Thursday a settlement with eToro, a trading app for stocks, financial assets and cryptocurrencies.
eToro’s U.S. arm will block U.S. customers from trading most cryptocurrencies on its platform, except for Bitcoin, Bitcoin Cash and Ethereum, according to the SEC.
Tel Aviv-based EToro will pay $1.5 million to settle allegations that it operated an unregistered broker and an unregistered clearing agency.
US customers who hold assets other than the three permitted cryptocurrencies will have 180 days to sell their tokens.
There are currently over 100 cryptocurrencies listed on the eToro website, including XRP, Solana, and Polygon.
“By removing tokens offered as investment contracts from its platform, eToro has chosen to comply and operate within the established regulatory framework,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement.
Yoni Assia, co-founder and CEO of eToro, said in a statement that his company’s settlement with the SEC will have minimal impact on its business and that users outside the United States will still be able to trade cryptocurrencies.
“We now have a clear regulatory framework for crypto assets in our home markets, the UK and Europe, and we believe we will see a similar situation in the US in the near future,” he said.
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Crackdown on Cryptocurrency Exchanges
The SEC’s settlement with eToro continues the agency’s recent crackdown on cryptocurrency exchanges.
Over the past year, the regulator has filed lawsuits against Binance, Coinbase and Kraken, three of the world’s largest exchanges.
In May, the SEC notified Robinhood, a trading app similar to eToro that caters to retail investors, that it was the target of possible enforcement action over its cryptocurrency trading activity.
Since the failure of Sam Bankman-Fried’s FTX exchange in November 2022, the SEC has also targeted other types of crypto projects, including Tron, OpenSea, and Consensys.
Ether is fine
Under the deal, eToro will be allowed to allow U.S. clients to trade Ether, the second-largest cryptocurrency with a market capitalization of $282 billion.
Earlier this year, the agency indicated that Ether could be considered an unregistered security.
The SEC has reportedly subpoenaed companies that did business with the Ethereum Foundation, a nonprofit organization that oversees the Ethereum blockchain.
However, over the summer, the SEC reversed course and approved the first spot Ether exchange-traded funds, which went live in July.
Ben Weiss is a Dubai correspondent for DL News. Got a tip? Email him at bweiss@dlnews.com.
