- eToro trading platform will restrict U.S. crypto trades to Bitcoin, Ethereum, and Bitcoin Cash following a settlement with the SEC.
- The SEC has fined eToro $1.5 million for operating as an unregistered crypto broker and clearing agency.
As a seasoned analyst with over two decades of experience in financial markets and regulatory compliance, I find myself closely monitoring the evolving landscape of digital assets and their interactions with regulators. The recent settlement between eToro and the U.S. Securities and Exchange Commission (SEC) is yet another significant development that underscores the need for crypto platforms to navigate the complex web of regulations in the United States.
As an analyst, I’m reporting that I, myself, have learned about the decision made by eToro, a trading platform I closely follow, to reach a settlement with the United States Securities and Exchange Commission (SEC). This settlement involves eToro agreeing to discontinue most of its cryptocurrency offerings for its customers based in the U.S.
Since 2020, the U.S. Securities and Exchange Commission (SEC) has alleged that eToro failed to comply with federal registration requirements for offering cryptocurrency assets considered as securities.
In the terms of the agreement, eToro is required to pay a fine of $1.5 million due to their unlicensed operation as a broker and clearing agency, particularly in relation to their cryptocurrency offerings.
Execs weigh in
Regarding this, Yoni Assia, co-founder and CEO of eToro, shared his views, stating that the agreement enables the firm to proceed with its plans.
Let’s prioritize offering cutting-edge and fitting products across our varied U.S. operations. Given that we are an early adopter and worldwide frontrunner in cryptoassets, plus a substantial player in regulated securities, it’s crucial for us to maintain compliance and collaborate closely with regulators from different parts of the globe.
It’s worth mentioning that Assia wasn’t the only one who offered a response; several other industry experts shared their thoughts as well.
For instance, Lowell Ness, a partner at Perkins Coie, added his perspective, stating,
It’s intriguing how these parties seem to reach such extreme resolutions, especially considering that previous federal court judgments classified programmatic trades as non-securities transactions. This settlement underscores a potentially widening discrepancy between current regulatory interpretations and some initial court rulings.
What’s more to it?
In other words, eToro is restricting American users to trade exclusively in Bitcoin (BTC), Bitcoin Cash (BCH), and Ethereum (ETH) within their platform.
In a span of 180 days, if you’re holding any other cryptocurrencies besides the one being mentioned, you won’t be able to trade them anymore once this period is over. Instead, you’ll have the opportunity to sell them during this timeframe.
This choice represents a major change in the cryptocurrency services provided by the platform, due to regulatory obstacles. Yet, this action has sparked considerable controversy, as some perceive it as excessive intervention by the Securities and Exchange Commission.
Commenting on the issue, Drew Hinkes, Partner at K&L Gates, shared his thoughts on X, noticing,
It’s important to note that the issues encountered with eToro are not unique; many prominent cryptocurrency platforms, such as Coinbase, Kraken, Binance, and Uniswap [UNI], have likewise encountered legal hurdles with the Securities and Exchange Commission (SEC).
In some instances, the fights continue, but in others, they’ve come to an end, with the SEC claiming victory.
SEC fines report unveiled
It’s been disclosed in a recent study that from 2013 to 2024, the SEC levied substantial fines on well-known cryptocurrency businesses, providing examples and explaining the types of regulatory infractions these companies were found guilty of.
According to the report,
Beginning in 2013, the SEC has imposed penalties totaling more than $7.42 billion on crypto companies and individuals. Strikingly, about 63% of these fines, equivalent to approximately $4.68 billion, were issued in a single year, which happens to be 2024.
Starting from 2022, the SEC (Securities and Exchange Commission) has intensified its actions to oversee the cryptocurrency market, issuing fines against companies and taking action against executives to highlight increased supervision.
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2024-09-13 23:36