As a seasoned crypto investor with over a decade of experience navigating the volatile and ever-changing landscape of digital assets, I must admit, this latest development with eToro has left me scratching my head more than usual. The SEC’s decision to limit eToro’s trading options is certainly not a move that fosters confidence in the cryptocurrency market.
Over the following six months, nearly all cryptocurrency trading on the U.S. branch of the financial services firm, eToro, is expected to halt as a result of a directive received from the Securities and Exchange Commission (SEC).
Based on an announcement by the Securities and Exchange Commission (SEC), eToro has been found to have broken federal securities laws since at least 2020. Consequently, the platform will incur a penalty of $1.5 million and restrict a certain number of cryptocurrencies for trading.
SEC Announces Settlement With eToro
As a financial analyst, I find myself in a position where I must disclose that I was recently made aware of allegations brought forth by the SEC against eToro. The charges claim that eToro has been functioning as an unregistered broker and clearing agency while also facilitating the purchase and sale of cryptocurrency assets on its online trading platform, which are being treated as securities under federal law. However, during this operation, it appears that eToro failed to adhere to the registration requirements stipulated within federal securities laws.
According to the agreement reached, eToro has consented not to break federal securities regulations any further. From now on, the platform will limit its offerings to Bitcoin (BTC), Bitcoin Cash (BCH), and Ether (ETH) for its users.
In compliance with the SEC’s instructions, eToro users have 180 days to sell any assets that are being phased out from the platform. If they fail to do so, eToro will liquidate their cryptocurrencies and return the funds to the account holders. The SEC stated that the online trading platform neither admitted nor denied the accusations but agreed to settle the matter instead.
eToro has decided to follow the rules and regulations by no longer allowing tokens that function as investment contracts on their platform. This decision not only improves investor safety but also sets a precedent for other cryptocurrency intermediaries. The $1.5 million fine is a result of eToro agreeing to stop breaking federal securities laws as it carries out its operations in the U.S., according to Gurbir Grewal, Director of the SEC’s Division of Enforcement.
More Regulatory Issues
For several years now, eToro has been making efforts to adhere to the regulations set by the SEC. By June 2023, the platform had imposed limitations on various cryptocurrencies deemed as securities according to the SEC’s legal actions against competitors like Coinbase and Binance.
Among the investments, you’ll find Algorand (ALGO), Decentraland (MANA), Dash (DASH), and Polygon (MATIC). It’s worth mentioning that this company had previously removed Ripple (XRP), Cardano (ADA), and Tron (TRX) from its portfolio due to various reasons over the past few months.
Currently, eToro isn’t merely dealing with scrutiny from the SEC; they’ve also been taken to court by the Australian Securities and Investments Commission last month, allegedly due to causing harm to investors via their offered products.
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2024-09-12 18:56