Retail trading platform eToro will stop offering nearly all cryptocurrencies to its customers as part of a settlement with the U.S. Securities and Exchange Commission, the regulator announced Thursday.
eToro also agreed to pay a fine of $1.5 million (approximately Rs. 12.5 crore) to settle charges that the company operated as an unregistered broker and unregistered clearing agency in connection with its cryptocurrency offering.
The SEC alleged that eToro offered its U.S. customers the ability to trade cryptocurrencies that the regulator considered securities since at least 2020, but that the company failed to comply with federal securities law registration requirements.
The company has neither acknowledged nor denied the SEC’s findings. The settlement only affects the company’s U.S. users.
In a statement, eToro co-founder and CEO Yoni Assia said the settlement allows the company to “focus on delivering innovative and relevant products across our diversified U.S. operations.”
“As an early adopter and global pioneer of crypto assets and a major player in the regulated securities space, it is important that we comply with regulations and work closely with regulators around the world,” Assia said.
As of now, eToro clients in the United States can only trade Bitcoin, Bitcoin Cash, and Ether on the platform. eToro is offering its clients the ability to sell all other tokens for 180 days.
“By removing tokens offered as investment contracts from its platform, eToro has chosen to comply with and operate within our established regulatory framework,” said Gurbir Grewal, director of the SEC’s Division of Enforcement, in a statement.
“This resolution not only enhances investor protection, but also provides a path for other crypto intermediaries.”
The SEC has argued that most cryptocurrencies are securities and subject to SEC registration rules. However, many crypto companies dispute this, accusing the regulator of over-intrusiveness.
The SEC is embroiled in legal battles with a number of crypto platforms, including Coinbase, Binance and Kraken, all of which argue that crypto assets—unlike stocks and bonds—do not meet the definition of securities.
eToro is considering an initial public offering in New York or London, Assia told the Financial Times in March. The company had attempted to go public in 2021 through a merger with a blank-check company in a $10.4 billion (roughly Rs. 87,278 crore) deal, but abandoned that deal a year later.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
