eToro Pares Down Crypto Biz in $1.5 Million SEC Settlement

Cryptocurrency trading platform eToro has agreed to pay a $1.5 million government settlement.

As the U.S. Securities and Exchange Commission (SEC) announced Thursday (Sept. 12), the settlement stems from charges that eToro’s platform operated an unregistered broker and clearing agency, facilitating the buying and selling of certain crypto assets as securities.

In addition to the settlement, eToro has also agreed to offer only “a limited set of crypto assets available for trading,” the SEC said: bitcoin, bitcoin cash and ether.

“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,” Gurbir S. Grewal, director of the SEC’s enforcement division, said in a news release.

“The $1.5 million penalty reflects eToro’s agreement to cease violating applicable federal securities laws as it continues its U.S. operations.”

eToro, which has not admitted wrongdoing, announced it would give customers the functionality to sell all other crypto assets for just 180 days following the SEC’s order.

“As a company serving over 38 million registered users from more than 75 countries, the terms of the settlement will have a minimal impact on our global business,” Yoni Assia, eToro’s co-founder and CEO, said in a press release.

“Outside of the United States, eToro users will continue to enjoy access to over 100 cryptoassets. As a global, multi-asset trading and investing platform we continue to experience strong growth and remain committed to becoming a public company in the future.”

The settlement comes as cryptocurrencies show potential as a payment method, as PYMNTS wrote earlier this week. But despite crypto’s promise, “its longstanding illicit reputation continues to hamstring acceptance as the landscape matures,” that report said.

This month has seen British regulators charge a London man with operating several unlicensed crypto ATMs, processing $3.4 million in cryptocurrency transactions in a country that has no legal crypto ATMs.

Meanwhile, the U.S. Federal Trade Commission (FTC) released data last week showing that the amount of money consumers lost to scams connected to bitcoin ATMs climbed to $114 million last year, a tenfold increase since 2020.

And the FBI announced recently that crypto-related complaints made up 10% of all financial fraud complaints last year, but half of the total losses, with losses to financial fraud involving the use of cryptocurrency reaching $5.6 billion, a 45% increase.