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The Securities and Exchange Commission (SEC) has announced that it has reached a settlement with eToro USA LLC regarding charges of operating an unregistered broker and clearing agency for crypto asset trading.
According to the SEC's order, eToro has agreed to pay a $1.5 million penalty and will significantly reduce its crypto asset offerings to U.S. customers. The company will now only allow trading of Bitcoin, Bitcoin Cash, and Ether on its platform for U.S. users.
The SEC found that since at least 2020, eToro had been operating as a broker and clearing agency, enabling U.S. customers to trade crypto assets offered as securities through its online platform. However, the company did not comply with the registration provisions required by federal securities laws.
eToro has announced that it will provide customers with a 180-day window to sell all crypto assets other than Bitcoin, Bitcoin Cash, and Ether following the issuance of the SEC's order.
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. This resolution not only enhances investor protection, but also offers a pathway for other crypto intermediaries."
As part of the settlement, eToro agreed to a cease-and-desist order without admitting or denying the SEC's findings. The company is required to liquidate any remaining crypto assets being offered as securities that it cannot transfer to customers within 187 days of the order and return the proceeds to the respective customers.
