eToro will only allow U.S. customers to trade Bitcoin, Bitcoin Cash, and Ether.
The U.S. Securities and Exchange Commission (SEC), said trading platform eToro USA LLC has agreed to pay a $1.5 million penalty for operating as an unregistered broker and clearing agency.
In an announcement, the SEC said eToro had been operating as a broker and clearing agency since at least 2020, providing U.S. customers with the ability to trade crypto assets that were being offered and sold as securities.
The federal registration requirements for brokers and clearing agencies were not being met by eToro at the time. According to the SEC, transactions involving cryptocurrency assets that qualified as investment contracts were permitted on eToro’s platform and ought to have been registered as securities.
Platform to Limit Range of Crypto Assets Traded
eToro will soon restrict the variety of cryptocurrency assets that can be traded on its platform.
Customers in the United States will only be able to trade Bitcoin, Bitcoin Cash, and Ether, according to eToro. Most people agree that these digital assets do not qualify as securities under existing US law.
After the SEC issues its order, customers will have 180 days to sell any remaining cryptocurrency assets. Any remaining cryptocurrency assets that eToro is unable to transfer to customers will be liquidated, and the proceeds will be given back to them.
To comply with our established regulatory framework, eToro has decided to remove tokens offered as investment contracts from its platform. This resolution not only enhances investor protection, but also offers a pathway for other crypto intermediaries,” said Gurbir Grewal, director of the SEC’s division of enforcement.
Grewal stated, “eToro’s agreement to cease violating applicable federal securities laws as it continues its U.S. operations is reflected in the $1.5 million penalty.”