eToro Settles with SEC, Limited to Trading Bitcoin, BCH, and ETH Only
TL;DR
- eToro has settled with the SEC, agreeing to pay a $1.5 million fine and limiting its trading to $BTC, $BCH, and $ETH.
- The settlement sheds light on the SEC's classification of digital assets, raising questions about the regulatory landscape for the crypto industry.
Trading platform eToro has reached a settlement with the U.S. Securities and Exchange Commission (SEC) over allegations of operating as an unregistered broker and clearing agency. The SEC claimed that eToro facilitated trading in certain crypto assets considered securities. As part of the settlement, eToro will pay a $1.5 million fine and can only trade $BTC, $BCH, and $ETH.
Headquartered in Israel, eToro is relatively small in the U.S. crypto market, with around 240,000 customer accounts compared to Coinbase's 100 million. However, the implications of this settlement are significant, as it provides insights into the SEC's stance on which digital assets are classified as securities. Legal experts have shared their perspectives, emphasizing the need for clearer guidance on digital asset classifications.
Joseph Tully, a securities litigation lawyer, noted that the SEC appears to consider $BTC, $BCH, and $ETH as commodities rather than securities. However, he highlighted the lack of legal guidance regarding other digital assets. Former SEC lawyer Alexandra Damsker expressed disappointment over the settlement, suggesting that the SEC should seek court determinations instead of cutting off business operations.
As the industry watches for further developments, this settlement underscores the ongoing regulatory challenges facing crypto platforms.
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