eToro Suspends Trading of Digital Assets Following SEC Settlement
eToro, a prominent trading platform, has announced the suspension of trading for most digital assets in response to a $1.5 million settlement with the U.S. Securities and Exchange Commission (SEC). This decision follows an investigation, which revealed that eToro had allowed U.S. customers to trade certain crypto assets classified as securities without meeting federal registration requirements.
Key Findings from the SEC Investigation
The SEC’s inquiries highlighted that eToro had been non-compliant in their operations regarding digital securities since 2020. Although the platform did not formally admit or deny the SEC’s claims, it has agreed to limit its crypto offerings to a select few assets, including:
Comments from SEC Officials
Gurbir S. Grewal, the SEC’s Director of Enforcement, noted the importance of eToro’s commitment to addressing these violations. He remarked:
“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.”
Future Steps for eToro
As part of its compliance agreement, eToro has been given a period of 180 days to liquidate all other digital assets. This decision falls within the SEC’s broader initiative to regulate several crypto-related firms, including Binance, Kraken, and Coinbase. Moreover, the agency has indicated potential legal actions against other platforms such as Robinhood and NFT marketplace OpenSea, culminating in the issuance of Wells Notices.
Response from eToro Leadership
Yoni Assia, co-founder and CEO of eToro, expressed that the settlement represents a pivotal opportunity for the company to progress and concentrate on providing innovative products in the U.S. market. He stressed the firm’s dedication to ensuring compliance. He stated:
“It is important for us to be compliant and to work closely with regulators around the world. We now have a clear regulatory framework for cryptoassets in the UK and Europe, and we believe we will see similar in the US in the near future. Once this is in place, we will look to enable trading in the cryptoassets that meet this framework.”
User Options Moving Forward
eToro has provided its users with options regarding their crypto holdings. They can close their positions or transfer supported coins to the eToro wallet before March 11, 2025. By March 18, 2025, any remaining crypto positions—excluding those on Bitcoin, Bitcoin Cash, and Ethereum—will be liquidated, with the proceeds being credited to users’ cash balances.
Importantly, eToro indicated:
“Only those positions that cannot be transferred to the wallet will be liquidated on March 18, 2025. This represents less than 3% of the total dollar value of US customers’ crypto assets.”
