eToro to Pay $1.5 Million to Settle SEC Charges Over Unregistered Operations

eToro, a popular crypto exchange, has settled with the Securities and Exchange Commission (SEC) over allegations that it operated as an unregistered broker and clearing agency.

The SEC announced today that eToro will pay a $1.5 million penalty and limit the crypto assets available for trading on its platform. The settlement stems from findings that, since at least 2020, eToro allowed U.S. customers to trade crypto assets considered securities without adhering to registration requirements under federal securities laws.

The SEC’s order requires eToro to “cease and desist from violating the applicable federal securities laws” and restrict trading to only Bitcoin, Bitcoin Cash, and Ether for U.S. customers. eToro stated it will provide users with a 180-day period to sell all other crypto assets currently available on its platform.

“By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. He added that the settlement “enhances investor protection” while offering a model for other crypto intermediaries.

eToro agreed to the cease-and-desist order to liquidate any crypto assets that cannot be transferred to customers within 187 days. The SEC emphasized that the resolution ensures eToro will no longer violate federal securities laws while continuing its U.S. operations.

Yoni Assia, eToro’s Co-founder and CEO, commented on the settlement, stating, “This settlement allows us to move forward and focus on providing innovative and relevant products across our diversified U.S. business. U.S. users can continue to trade and invest in stocks, ETFs, options, and three of the largest crypto assets.”

Assia emphasized that the settlement terms would have a minimal impact on eToro’s global operations, noting that the company serves over 38 million registered users from more than 75 countries. Outside of the U.S., eToro users will still have access to over 100 crypto assets. Assia further highlighted eToro’s commitment to compliance and collaboration with regulators, expressing optimism about future regulatory clarity in the U.S.

The Shib Daily reached out to eToro, and it confirmed that starting September 11, 2024, U.S. users will be limited to opening new crypto positions only in BTC, BCH, and ETH. Opening new positions in any other cryptocurrencies will not be possible.All other crypto positions must be closed or transferred to the eToro Wallet by March 11, 2025. After this date, unsupported assets will be liquidated, impacting less than 3% of the total value of U.S. customers’ crypto assets. From March 11, 2025 users will only be able to close (sell) crypto positions in BTC, BCH and ETH.

Before March 11, 2025, users have the option to settle their positions in cryptocurrency or move their crypto assets into the eToro Wallet for eligible coins. According to eToro, any crypto asset positions still open on March 18, 2025, with the exception of BTC, BCH, and ETH, as well as those not compatible with the wallet, will be closed out. The funds from this closure will be added to the users’ cash balance within their investment account.

In addition, eToro said that the majority of eToro users in the US will not need to take any action. Only the positions that can’t be moved to the wallet will be closed on March 18, 2025, which affects less than 3% of the total value of crypto assets held by US clients. Coins that can be transferred to the eToro crypto wallet are not required to be closed and can be kept in open positions on the eToro platform without any required action.

This article has been updated to include comments from eToro’s co-founder and CEO, as well as the specific dates when new crypto positions will be closed.

Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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