eToro Limits US Crypto Trading After $1.5M SEC Settlement

Key Points

eToro will proceed with US trades of Bitcoin, Bitcoin Cash, and Ethereum after the SEC settlement.
Recent SEC actions encompass settlements and lawsuits involving notable crypto exchanges such as Binance and Coinbase.

The SEC has reached a settlement with the trading platform eToro, mandating that the company limit crypto trading for US clients to only Bitcoin, Ethereum, and Bitcoin Cash.

Under the agreement revealed Thursday, eToro is to pay a $1.5 million fine to resolve claims that it operated as an unregistered broker and clearing agency. The US division of the Tel Aviv-based company must provide customers 180 days to liquidate any crypto assets not in the permitted three cryptocurrencies.

This settlement considerably reduces eToro’s crypto offerings for US customers, as the platform presently lists over 100 different tokens, including well-known currencies like XRP, Solana, and Polygon. SEC enforcement head Gurbir S. Grewal stated that by eliminating tokens considered as investment contracts, “eToro has opted to comply and function within our established regulatory framework.”

eToro CEO Yoni Assia downplayed the ramifications, asserting that the settlement would have little effect on the company’s operations and that users outside the US can still access the complete range of crypto trading options. He expressed hope regarding future US crypto regulations, remarking, “We now have a clear regulatory framework for crypto assets in our primary markets of the UK and Europe, and we expect to see something similar in the US shortly.”

The SEC’s crypto crackdown persists

This eToro settlement continues the SEC’s wider crackdown on crypto exchanges throughout the past year. The agency has initiated lawsuits against significant platforms such as Binance, Coinbase, and Kraken, while also alerting Robinhood regarding a potential enforcement action linked to its crypto business. This regulatory scrutiny spans further than exchanges to additional crypto projects, including Tron, OpenSea, and Consensys, among others.

Significantly, the settlement permits eToro to persist in offering Ethereum trading to US clients, despite earlier signals from the SEC suggesting it might classify Ether as an unregistered security. This is in line with the agency’s recent endorsement of spot Ether exchange-traded funds, indicating a shift in its perspective on the second-largest cryptocurrency by market capitalization.