eToro Cuts Crypto Options for U.S. Users

eToro has agreed to pay $1.5 million to settle with the U.S. Securities and Exchange Commission (SEC) over violations of federal securities laws.

eToro has settled with the U.S. Securities and Exchange Commission (SEC) for $1.5 million over violations of federal securities laws, the SEC announced Monday.

As part of the settlement, eToro will halt nearly all crypto trading for U.S. customers, allowing only Bitcoin (BTC), Bitcoin Cash (BCH), and Ethereum (ETH) transactions.

eToro Cuts Crypto Options for U.S. Users

The SEC had alleged that eToro, which began offering crypto trading to U.S. customers in 2020, operated as an unregistered broker and clearing agency. The SEC claimed that eToro allowed U.S. customers to trade cryptocurrencies that the SEC considers to be securities, without being properly registered.

eToro did not admit or deny these allegations in settling the case.

U.S. users will have 187 days to sell off any other cryptocurrencies, as part of the agreement. After that, any remaining holdings will be converted to cash and returned to users.

The settlement will allow eToro to move forward and focus on its U.S. business, Yoni Assia, eToro’s CEO, said in a statement. He also noted that eToro will continue to offer stocks, ETFs, and options trading, while U.S. crypto options will be limited as eToro halts crypto trading.

eToro’s Settlement with the SEC

Gurbir S. Grewal, director of the SEC’s enforcement division, said in a statement that eToro’s cooperation and compliance could set an example for other platforms.

“eToro’s substantial cooperation and agreement to register with the Commission will help ensure that U.S. markets remain fair and orderly,” Grewal said. “This settlement and eToro’s decision to align with U.S. regulatory requirements are significant steps in facilitating eToro’s continued operation in the U.S.”

The settlement also highlights the broader regulatory clampdown in the crypto industry. Back in 2020, eToro delisted Ripple (XRP) and other tokens following the SEC’s lawsuit against Ripple.

Despite these U.S. regulatory hurdles, the company has continued its services and secured approval to operate in the EU.

Since 2013, the U.S. Securities and Exchange Commission (SEC) has levied more than $7.4 billion in fines against crypto-related entities, a sign of the increasing scrutiny the sector has faced from the regulator.

By restricting U.S. users to BTC, BCH, and ETH, eToro’s settlement reinforces the SEC’s stance that many digital assets may be classified as securities under U.S. law.