The Securities and Exchange Commission has reached a settlement with eToro.
eToro was charged with operating as an unregistered broker in connection with its crypto trading platform. As part of the settlement, eToro will end most of its crypto trading activity on the platform, according to the Thursday announcement from the SEC.
Earlier this week, eToro announced that it would alter its crypto offerings “due to the regulatory environment.”
US users can only trade bitcoin, bitcoin cash and ether. Other positions will be liquidated in mid-March of next year.
“Proceeds from these liquidations will be transferred to users’ available cash balance in their investment accounts,” the company added.
Additionally, eToro will pay the SEC $1.5 million to settle the charges, and the company walks away without admitting or denying the findings from the SEC.
“The SEC’s order finds that, since at least 2020, eToro operated as a broker and clearing agency by providing U.S. customers the ability, through eToro’s online trading platform, to trade crypto assets being offered and sold as securities, but eToro did not comply with the registration provisions of the federal securities laws,” the SEC said.
“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,” SEC’s Gurbir Grewal said.
This is not the first time that the SEC’s targeted a financial services company. The SEC previously issued Robinhood a Wells notice, though it has yet to announce any formal legal action following the notice.
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Source: https://blockworks.co/news/etoro-sec-settlement