The Securities and Exchange Commission (SEC) announced today that eToro USA LLC has agreed to a $1.5 million settlement over charges related to operating an unregistered broker and clearing agency. These charges stem from eToro’s platform facilitating the buying and selling of certain crypto assets categorized as securities.
Going forward, eToro will limit its crypto trading offerings to Bitcoin, Bitcoin Cash, and Ether, complying with SEC regulations. The company will provide its customers with a 180-day window to sell off any other crypto assets on its platform.
The SEC’s order found that eToro had been functioning as a broker and clearing agency since at least 2020, offering U.S. customers the ability to trade crypto assets considered securities without adhering to the necessary registration provisions of federal securities laws.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, 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.” He further emphasized that this resolution enhances investor protection and sets a precedent for other crypto intermediaries.
eToro, without admitting or denying the SEC’s findings, has agreed to the cease-and-desist order, the $1.5 million penalty, and will liquidate any non-compliant crypto assets within 187 days, returning the proceeds to customers.
