eToro limits crypto trading options

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eToro has agreed to pay a $1.5 million fine to the U.S. SEC for operating as an unregistered broker and clearing agency, and the trading platform will restrict its U.S. customers to trading only Bitcoin, Bitcoin Cash, and Ethereum.

eToro violated U.S. laws

The SEC announced that eToro had been acting as a broker and clearing agency since at least 2020, allowing U.S. customers to trade crypto assets that were later classified as securities.

At that time, eToro didn’t meet the federal registration requirements for brokers and clearing agencies, thus, they violated the laws.

The SEC also stated that the crypto assets traded on eToro’s platform fit the definition of investment contracts, which means they should have been registered as securities.

eToro will delist most of the crypto

After the ruling, eToro will limit the types of crypto assets available for trading. U.S. customers will now only be able to trade Bitcoin, Bitcoin Cash, and Ether, which are generally not considered securities under U.S. law.

All other crypto assets will be phased out, and customers will have 180 days to sell these assets before the SEC’s order takes effect.

Any remaining crypto assets that can’t be transferred will be liquidated by eToro, and the proceeds will be returned to customers.

Crypto trading, or securities trading? Big difference in the paperwork!

SEC’s director of enforcement, Gurbir Grewal stated that by removing tokens classified as investment contracts from its platform, eToro is taking important steps to comply with existing regulations.

This resolution not only wants to enhance investor protection but also provides an example, a framework for other crypto intermediaries to follow.

Grewal also mentioned that the $1.5 million fine reflects eToro’s commitment to stop violating federal securities laws while continuing its operations in the U.S.

Many expets think that this action by the SEC could signal a more stringent regulatory environment for crypto exchanges in the future, and as the SEC continues to enforce compliance, other trading platforms may need to reassess their offerings to avoid similar penalties.

Have you read it yet? Dogecoin, Shiba Inu, or Pepe is the most profitable memecoin?


Disclosure:This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Kriptoworld.com accepts no liability for any errors in the articles or for any financial loss resulting from incorrect information.

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