Online brokerage and trading platform eToro has announced it has reached a settlement with the U.S. Securities and Exchange Commission over charges that the firm allowed its users to trade unregistered crypto-asset securities in violation of federal securities laws. Under the agreement, eToro will pay $1.5 million and scale back the ability of U.S. customers to trade most cryptocurrencies.
US Customer Impact: Only 3%
The new restrictions will limit U.S. customers to trading just bitcoin, bitcoin cash, and ether on the platform. eToro took pains to stress that its users will hardly be impacted: “Only about 3% of customer-held crypto assets, by dollar value, are affected”.
“In most cases, U.S. users don’t have to take any action”, an eToro spokesperson said. “Only positions that cannot be transferred to the eToro crypto wallet are affected”.
SEC’s Crypto Crackdown Intensifies
The SEC has recently cracked down on the crypto sector, going after the likes of Ripple, Coinbase, and Binance for allegedly flouting federal securities laws. The settlement with eToro forms part of a general attempt at regulations by the agency of the burgeoning cryptocurrency market, although questions remain over whether some tokens classify as securities.
Shaping the Future
Despite this regulatory headwind, the chief executive of them, Yoni Assia, is optimistic for the future. “This settlement allows us to move forward and focus on providing innovative and relevant products across our diversified U.S. business”, he said.
A more settled regulatory environment for crypto assets, which already exists in the U.K. and Europe, is expected to emerge over time in the United States, the company said.
Looking Ahead: Fewer Options but Less Impact The settlement does represent a landmark for them on its way to full compliance with U.S. laws, but real-life effects for its customer base may well remain negligible. Absolutely the majority of customers will not be impacted, and positions in coins transferable to the eToro crypto wallet will not need any revisions of any sort.
For the time being, U.S. users will have to navigate a much more restricted trading environment; this might be the case, but eToro’s focus on compliance may be one of those gates leading to a more stable crypto-trading ecosystem in the future.
