(Bloomberg) — EToro USA LLC agreed to pay $1.5 million and allow American customers to only trade only a handful of cryptocurrencies on its platform to settle US Securities and Exchange Commission allegations that it operated as an unregistered broker and clearing agency.
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The social trading and investment platform entered into a cease-and-desist order without admitting or denying the allegations, the agency said in a statement Thursday. Since at least 2020, eToro operated as a unregistered broker and clearing agency by allowing US customers the ability to trade crypto assets as securities, according to a complain.
The only crypto assets that eToro’s US customers can trade on the platform will be Bitcoin, Bitcoin Cash and Ether. As part of the agreement, eToro will allow users to sell all other crypto assets for 180 days after the issuance of the SEC’s order.
“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 Grewal, director of the SEC’s division of enforcement, said in the statement.
Last year, the Israel-based firm completed a $250 million funding round that valued the company at $3.5 billion. Its investors include ION Group, SoftBank Vision Fund 2 and Velvet Sea Ventures.
The settlement comes a few weeks after the SEC settled with crypto lending platform Abra, after alleging the startup with selling unregistered securities to consumers and operating as an unregistered investment company.
“We now have a clear regulatory framework for cryptoassets in our home markets of the UK and Europe and we believe we will see similar in the US in the near future,” Yoni Assia, co-founder and CEO of eToro, said in a statement.
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