Israeli-founded crypto platform eToro to pay $1.5m to settle charges with SEC
American users will only be able to trade Bitcoin, Bitcoin Cash and Ether, have 180 days to sell other crypto assets; eToro neither admits nor denies wrongdoing
The Israeli-founded online trading company eToro has agreed to pay $1.5 million to settle charges that it violated American securities laws in its cryptocurrency business, the US Securities and Exchange Commission announced on Thursday.
The federal agency had determined that various cryptocurrency assets offered on eToro were “offered and sold as securities, but eToro did not comply with the registration provisions of the federal securities laws.”
The company announced that going forward, the only cryptocurrency assets American customers will be able to trade on its platform will be Bitcoin, Bitcoin Cash and Ether. American users have 180 days to sell any other cryptocurrency assets on the site.
The company neither admitted nor denied wrongdoing as part of its settlement.
“By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
“This resolution not only enhances investor protection, but also offers a pathway for other crypto intermediaries,” he said.
EToro was founded in 2007 by Israeli brothers Yonatan and Ronen Assia as well as David Ring, originally pledging to “democratize” financial trading by making it more “game-like.”
A July 2021 Times of Israel investigation cited critics of the company who claimed that a significant share of eToro’s revenue comes from leveraged CFDs (Contract for Differences), a complex financial product ill-suited for unsophisticated investors, most of whom lose money.
The Times of Israel investigation also pointed to staffing connections between eToro and Israel’s outlawed, largely fraudulent binary options industry.
Simona Weinglass contributed to this report.
