- eToro has agreed to resolve the SEC settlement for $1.5 million
- The platform removed assets from the list that were considered securities
- Outside the U.S., eToro will continue to offer a broad list of crypto assets
eToro has agreed to resolve the SEC settlement and pay $1.5 million, the SEC announced on Thursday, September 12th.
Details of the Settlement Between eToro and the SEC
Previously, eToro was accused of operating an unregistered brokerage and clearing agency, facilitating the trading of cryptocurrencies as securities, which falls directly under SEC regulation.
eToro did not admit wrongdoing but agreed to settle the breach and pay $1.5 million, as well as to remove from the platform the features of trading cryptocurrencies that were treated as securities for U.S. users, leaving only Bitcoin, Bitcoin Cash, and Ethereum.
“The $1.5 million penalty reflects eToro’s agreement to cease violating applicable federal securities laws as it continues its U.S. operations.”
“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 resolution not only enhances investor protection but also offers a pathway for other crypto intermediaries,” Gurbir S. Grewal, director of the SEC’s enforcement division, said.
The company said that all holders of such cryptocurrencies will have 180 days to sell them or withdraw them to their wallets or other exchanges. Also, these restrictions only apply to the US, while in all other jurisdictions, eToro will continue to provide a wide range of cryptocurrencies for buying and selling.
“As a company serving over 38 million registered users from more than 75 countries, the terms of the settlement will have a minimal impact on our global business. Outside of the United States, eToro users will continue to enjoy access to over 100 cryptoassets. As a global, multi-asset trading and investing platform we continue to experience strong growth and remain committed to becoming a public company in the future,” Yoni Assia, eToro’s co-founder and CEO, said.
Simplifying Purchase Isn’t Always in Favor of Cryptocurrencies
All of this comes against the backdrop that efforts to illegally ease purchases could create problems for cryptocurrencies themselves and bring them into the regulatory realm, where they will start to break the law.
For example, a man in London has been charged with running several unlicensed cryptocurrency ATMs with a turnover of around $3.4 million in the country. Even though cryptocurrency itself is not illegal, this way of trading violates UK regulations, as crypto ATMs are not licensed for the entire UK.
Also, under-regulation often leads to fraud, and a recent report from the FTC indicates that 10 percent of all financial fraud complaints involve cryptocurrencies, and the amount lost with fake bitcoin ATMs has increased 10-fold since last year to 114 million.
Conclusion
Proponents and opponents of regulation can present their arguments as to how much it benefits the crypto industry.
However, we see how insufficient regulation enables fraud, and this is definitely a problem for all crypto investors, especially since reputation is critical for a growing domain.
That’s why all eyes are now on the U.S. elections in 2024, which should set the trend for crypto regulation around the world, and it’s also worth paying attention to Asia, which is ahead of the curve.
