The trading platform restricts U.S. users to Bitcoin, Bitcoin Cash, and Ethereum after a $1.5 million penalty from the SEC.
eToro Cuts Crypto Offerings in U.S. Following SEC Crackdown
In a move that underscores the growing regulatory scrutiny on crypto exchanges, retail trading platform eToro announced it will halt nearly all cryptocurrency offerings to its U.S. customers. This decision follows a settlement with the U.S. Securities and Exchange Commission (SEC), which claimed eToro was operating as an unregistered broker and clearing agency in connection with its crypto offerings.
As part of the settlement, eToro has agreed to pay a $1.5 million fine. The SEC claimed that since 2020, eToro let U.S. customers trade crypto assets deemed securities without proper registration, as part of a wider crackdown on unregistered platforms.
Going forward, U.S. customers will be restricted to trading only Bitcoin, Bitcoin Cash, and Ether on eToro. The platform will allow customers a 180-day window to sell other tokens that will no longer be supported.
SEC Tightens Grip on Crypto Exchanges
The SEC’s settlement with eToro highlights the ongoing clash between U.S. regulators and crypto exchanges over compliance with federal securities laws. However, many in the crypto industry, including eToro, have disputed these claims, accusing the SEC of regulatory overreach.
The SEC has been involved in legal disputes with other major players in the space, including Coinbase, Binance, and Kraken. These companies argue that crypto assets should not be treated in the same way as traditional financial instruments like stocks or bonds. The ongoing litigation between the SEC and these firms could ultimately determine how cryptocurrencies are regulated in the United States.
Despite eToro’s settlement, the platform has not admitted or denied the SEC’s allegations, signaling the ongoing tension between regulators and crypto firms. According to Gurbir S. Grewal, director of the SEC’s enforcement division, eToro’s cooperation is seen as a positive step and may provide a framework for other crypto intermediaries looking to comply with U.S. laws.
Impact of Crypto Regulations on eToro and the Industry
The SEC’s crackdown on crypto regulations is part of a broader effort to assert control over the expanding blockchain and cryptocurrency sectors. Since 2013, the SEC has imposed fines totaling over $7.4 billion on various crypto entities for violations of U.S. securities laws. As the SEC tightens enforcement, firms like eToro must adjust their offerings to avoid hefty financial penalties.
eToro’s decision to limit U.S. trading to Bitcoin, Bitcoin Cash, and Ether marks a major shift from its previously diverse crypto offerings, driven by the SEC’s allegations of unregistered securities. U.S. customers now have 180 days to divest their holdings in unsupported tokens.
SEC’s Regulatory Push Redefines the Crypto Landscape
The settlement between eToro and the SEC is a clear indication of the regulatory challenges facing the crypto industry. With the SEC asserting its authority over crypto assets, platforms are being forced to rethink their offerings and compliance strategies. As the battle between regulators and the crypto industry continues, the future of crypto exchanges in the U.S. remains uncertain.
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