eToro Lawsuit Settles at $1.5 Million Payment and Ceasing Crypto Operations in The US
Sep 13, 2024
The United States financial regulator keeps its war against crypto exchange platforms and brokers, seeking litigation as the only way to restrict digital asset trading in the United States.
eToro, the famous security and crypto trading platform, is the latest victim of these prosecutions after reaching a settlement to close its case on Thursday, September 12th.
The eToro lawsuit settlement includes paying $1.5 million to the SEC and limiting crypto trading for US investors. Let’s track how this decision will affect the popular platform.
eToro Ceases Operations in The US
On September 12th, eToro announced that it reached a settlement with the United States Securities and Exchange Commission regarding its lawsuit against eToro. The SEC claims that eToro has been engaging in selling unregistered securities and acting as an unregistered broker and clearing agency.
The SEC requires brokerage firms, especially those offering crypto assets, to be registered at the federal registry. However, eToro and multiple other crypto exchanges plea that their offerings do not qualify as a brokerage.
As such, the SEC claims that eToro has been operating as an unregulated broker since 2020, growing wealth from registered securities. The agency says that with this step, the exchange will stop violating the registration provisions of the federal securities law.
The SEC vs. eToro Lawsuit Outcomes
The eToro pending settlement entails the payment of $1.5 million and stopping operations in the US. The agency gave eToro 187 days from the announcement date to liquidate its crypto holdings and transfer digital assets to traders.
As a result, US investors will have access only to Bitcoin, Ethereum, and Bitcoin Cash. The exchange allows its users to cash out their other crypto holdings within 180 days after the eToro settlement time.
However, US users will continue trading other eToro securities, including ETFs, stocks, commodities, and Forex currencies, while non-US traders will have access to 100+ crypto assets.
The Future of eToro
eToro stated that this decision will have “a minimal impact on global business” given the massive offerings across 75 countries, serving over 35 million users.
The crypto regulations in the US have been a hot debate, with a rising grey area when it comes to registered securities and allowed operations regarding digital assets and blockchain-based currencies.
eToro will continue its operations in clearly regulated markets like the newly introduced UK crypto law and EU’s MiCA.
Conclusion
With its ongoing legal battles against crypto exchanges and digital asset brokers, the SEC claims victory over the popular eToro platform. The eToro lawsuit settlement reached between both parties involves the payment of $1.5 million by the broker, who will limit its crypto offerings to US investors.
eToro will now offer only BTC, ETH, and BCH to US traders, in addition to other classic instruments like stocks, options, currencies, and ETFs.
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