EToro to Stop Most Crypto Trading in the US After $1.5m SEC Settlement
EToro also agreed to cease nearly all cryptocurrency trading and transactions for U.S. customers.
Trading platform EToro has announced that it will halt most of its cryptocurrency trading services in the United States. The move follows a $1.5 million settlement with the Securities Exchange Commission (SEC) over allegations of offering unregistered securities.
However, this marks the latest chapter in the ongoing regulatory tug-of-war between the SEC and crypto trading companies, as the SEC argues that most digital tokens qualify as securities under its jurisdiction.
According to an agreement disclosed by the SEC, eToro also agreed to cease nearly all cryptocurrency trading and transactions for U.S. customers. Moving forward, American users can only trade Bitcoin, Bitcoin Cash, and Ethereum on the platform.
Following the order issued on Sept. 12, the trading venue has 187 days to offboard all other cryptocurrencies and liquidate existing assets. Customers will receive proceeds equal to their balance. Etoro has refused to admit or deny SEC’s allegations.
SEC Regulatory Crackdown Intensifies on EToro
The SEC has been aggressively pursuing crypto firms, including giants like Coinbase, Binance, and Kraken. The agency maintains that many cryptocurrencies are securities and therefore subject to stringent registration requirements.
On the other side, these platforms argue that crypto assets are fundamentally different from traditional financial products like stocks and bonds, which are explicitly defined as securities under U.S. law.
For eToro, this isn’t the first time the platform has found itself on the wrong side of regulatory bodies. Earlier this year, the Philippines SEC accused the company of offering unregistered securities in that country.
SEC enforcement division director Gurbir S. Grewal stated, “By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework.”
Implications for Crypto Markets
eToro’s decision to halt most crypto trading in the U.S. is as a direct result of the SEC’s increasing pressure on digital asset platforms.
The regulatory body has slapped fines on crypto entities totaling over $7.4 billion since 2013, signaling a broad and sustained crackdown on the industry. Although eToro avoided debating whether specific cryptocurrencies are securities, its actions may set a precedent for other platforms operating in the U.S.
The platform’s recent compliance move could push other service providers to follow suit, especially if they wish to avoid costly legal battles and regulatory penalties.
