Trading platform eToro will halt trading of most digital assets on its platform following a $1.5 million settlement with the US Securities and Exchange Commission (SEC), according to a September 12 statement.
The SEC’s investigation found that since 2020, eToro has allowed US customers to trade crypto assets considered securities without complying with federal registration requirements.
While eToro has neither admitted nor denied the SEC’s allegations, it agreed to limit its crypto offerings to a few assets, including Bitcoin, Bitcoin Cash and Ethereum.
Gurbir S. Grewal, director of enforcement at the SEC, noted that the $1.5 million fine reflects eToro’s commitment to ending violations of federal securities laws while continuing operations in the U.S. .
He stated:
“By removing tokens offered as investment contracts from its platform, eToro has chosen to comply with regulations and operate within our established regulatory framework. This resolution not only improves investor protection, but also provides a path for other crypto intermediaries.”
As part of the agreement, eToro must liquidate all other digital assets within 180 days.
The move is part of the SEC’s broader regulatory crackdown on several crypto-related companies, including Binance, Kraken and Coinbase. Notably, the regulator has also hinted at legal action against Robinhood and NFT marketplace OpenSea, issuing a Wells Notice.
eToro’s answer
eToro co-founder and CEO Yoni Assia noted that the settlement allows the company to move forward and focus on offering innovative products within its U.S. operations.
Highlighting the company’s commitment to compliance, he said:
“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 the same in the US in the near future. Once this is achieved, we will look to enable trading of the crypto assets that comply with this framework.”
Meanwhile, eToro stated that its users can close their crypto positions or transfer supported coins to the eToro wallet before March 11, 2025.
By March 18, 2025, all remaining crypto holdings, except those on BTC, BCH, ETH or unsupported coins, will be sold and the proceeds will be credited to users’ cash balances in their investment accounts.
It added:
“Only those 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 US customers’ crypto assets.”