The US Securities and Exchange Commission announced a settlement Thursday with eToro, a trading app for stocks, financial assets, and crypto.
The US branch of eToro will stop US customers from trading most cryptocurrencies on its platform, except for Bitcoin, Bitcoin Cash, and Ethereum, according to the SEC.
EToro, whose headquarters is in Tel Aviv, will pay $1.5 million to settle allegations it was operating an unregistered broker and unregistered clearing agency.
US customers who hold assets other than three allowed cryptocurrencies will have 180 days to sell their tokens.
There are over 100 cryptocurrencies currently listed on eToro’s website, including XRP, Solana, and Polygon.
“By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework,” Gurbir S. Grewal, director of the SEC’s division of enforcement, said in a statement.
Yoni Assia, the co-founder and CEO of eToro, said in a statement that his company’s settlement with the SEC will minimally impact its business and that users outside the US will still be able to trade crypto.
“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,” he said.
Crypto exchange crackdown
The SEC’s settlement with eToro continues the agency’s recent crackdown on crypto exchanges.
In the past year, the regulator has filed lawsuits against Binance, Coinbase, and Kraken, three of the world’s largest exchanges.
In May, the SEC notified Robinhood, a trading app similar to eToro that caters to retail investors, that it is the target of a potential enforcement action because of its crypto trading business.
Since the failure of Sam Bankman-Fried’s FTX exchange in November 2022, the SEC has also targeted other types of crypto projects, including Tron, OpenSea, and Consensys.
Ether’s OK
Under the settlement, eToro will be permitted to allow US customers to trade Ether, the second largest cryptocurrency with a market value of $282 billion.
Earlier this year, the agency indicated that Ether may be deemed an unregistered security.
The SEC reportedly subpoenaed companies that had dealt with the Ethereum Foundation, a nonprofit that oversees the Ethereum blockchain.
However, in the summer, the SEC did an about-face and approved the first spot Ether exchange traded-funds, which went live in July.
Ben Weiss is a Dubai Correspondent at DL News. Got a tip? Email him at bweiss@dlnews.com.