eToro Reaches $1.5M SEC Settlement, Agrees to Stop Trading Most Cryptocurrencies

The only crypto assets U.S. customers will be able to trade on the company's platform are bitcoin, bitcoin cash and ether.

Israel-based trading platform eToro has reached a settlement with the U.S. Securities and Exchange Commission (SEC) over charges related to its crypto trading services. The SEC alleges that eToro operated an unregistered broker, an unregistered clearing agency and facilitated trading certain crypto assets as securities.

As part of the settlement, eToro will pay a $1.5 million civil penalty and has agreed to cease and desist from violating the applicable federal securities laws. The company will also make only a limited set of crypto assets available for trading by U.S. customers on the company’s platform.

Specifically, the only crypto assets that will be available for trading by U.S. customers on eToro's platform are bitcoin (BTC), bitcoin cash (BCH) and ether (ETH).

The SEC's order alleges that since at least 2020, eToro has offered and sold crypto assets that are being treated as securities. However, eToro did not comply with the registration provisions of the federal securities laws, the SEC said.

The order also alleges that eToro acted as a clearing agency for trades in crypto assets that are being treated as securities, but eToro did not register with the SEC as a clearing agency.

The SEC further alleges that eToro failed to fully disclose the risks associated with trading crypto assets, and the company made material misstatements and omissions in its marketing materials.

The settlement is the latest in a series of enforcement actions by the SEC against crypto trading platforms. In recent months, the SEC has also settled charges with Coinbase, Kraken and Binance.

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