EToro has agreed to a $1.5 million settlement with the U.S. Securities and Exchange Commission (SEC) over alleged violations of federal securities laws. As part of the agreement disclosed by the SEC, eToro will cease nearly all cryptocurrency trading and transactions for U.S. customers. Moving forward, American users will only be able to trade Bitcoin (BTC), Bitcoin Cash (BCH), and Ethereum (ETH) on the platform.

Following the SEC’s order issued on September 12, the trading venue has 187 days to offboard all other cryptocurrencies and liquidate existing assets. Customers will receive proceeds equal to their balance.

The SEC’s complaint claimed that eToro operated as an unlicensed broker and clearing agency since at least 2020. Although the exchange reached a settlement with the SEC, it neither admitted nor denied the SEC’s allegations. Gurbir S. Grewal, director of the SEC’s enforcement division, stated that eToro’s cooperation provides a pathway for other crypto intermediaries to comply with U.S. rules.

By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework. The $1.5 million penalty reflects eToro’s agreement to cease violating applicable federal securities laws as it continues its U.S. operations.

While the platform avoided debating the security status of cryptocurrencies, the settlement may set a precedent for future cases. Separating BTC, BCH, and ETH from other cryptocurrencies suggests that the SEC views most, if not all, other digital assets as securities.

EToro’s past decisions reinforce this perspective among some service providers. For example, in 2020, when the SEC sued Ripple, eToro delisted XRP and three other cryptocurrencies in response. Despite these actions, the company’s crypto services continued in other markets, securing a CySEC CASP approval to offer digital asset facilities in all EU countries.

Meanwhile, the SEC and other U.S. regulatory bodies have continued a sweeping enforcement campaign across the blockchain sector. SEC fines against crypto entities have exceeded $7.4 billion since 2013.

For more updates on cryptocurrency news, visit Global Crypto News.

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