eToro, a popular trading platform, has agreed to halt most cryptocurrency trading in the U.S. following a settlement with the U.S. Securities and Exchange Commission (SEC). The company will now allow U.S. customers to trade only three cryptocurrencies: Bitcoin (BTC-USD), Bitcoin Cash (BCH-USD), and Ethereum (ETH-USD). This decision comes on the heels of a $1.5 million settlement that eToro reached with the SEC after being charged for operating as an unregistered broker and clearing agency and for facilitating the trading of certain crypto assets as securities, according to a statement from the SEC.
SEC Cracks Down on Crypto
So, what’s the story here? The SEC alleged that eToro has been letting U.S. customers trade assets considered securities since at least 2020 without registering properly. According to the SEC’s enforcement director Gurbir Grewal, “By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework.” This move, he suggests, not only boosts investor protection but also shows a roadmap for other crypto companies.
eToro Aligns Crypto Offerings with SEC Rules
Yoni Assia, eToro’s co-founder and CEO, seems to be playing a strategic game. “As an early adopter and global pioneer of cryptoassets… it is important for us to be compliant and to work closely with regulators,” he said, as reported by Reuters. The company is focusing on “innovative and relevant products” rather than battling it out in court. While this pivot is bound to ruffle some feathers among U.S. customers, eToro is clearly aiming to avoid the kind of legal skirmishes that Coinbase (COIN), Binance, and Kraken are currently embroiled in with the SEC.
What’s Next for eToro?
For now, eToro has given its U.S. customers 180 days to sell off all other tokens before they are no longer available for trading. This move leaves eToro weighing its options, including a potential IPO in New York or London, as it works its way through a stormy regulatory environment.
