eToro trading: U.S. clients restricted to BTC, ETH, BCH post SEC deal

• eToro trading platform will restrict U.S. crypto trades to Bitcoin, Ethereum, and Bitcoin Cash following a settlement with the SEC.
• The SEC has fined eToro $1.5 million for operating as an unregistered crypto broker and clearing agency.

eToro trading platform has reached a settlement with the U.S. Securities and Exchange Commission (SEC), agreeing to halt most cryptocurrency offerings to its U.S. customers.

For context, the SEC accused eToro of providing access to crypto assets deemed as securities since 2020 without adhering to federal securities registration requirements.

As part of the settlement, eToro will pay a $1.5 million penalty for operating as an unregistered broker and clearing agency in connection with its crypto services.

Execs weigh in

Remarking on the same, eToro’s co-founder and CEO, Yoni Assia, expressed his thoughts, in a statement and said, the settlement allows the company to,

 “Focus on providing innovative and relevant products across our diversified U.S. business. As an early adopter and global pioneer of cryptoassets as well as a significant player in regulated securities, it is important for us to be compliant and to work closely with regulators around the world.”

Needless to say, Assia wasn’t the only one to respond to the situation. Several industry experts also weighed in.

For instance, Lowell Ness, a partner at Perkins Coie, added his perspective, stating, 

“It’s interesting to see parties agreeing to this kind of drastic settlement when viewed against federal court rulings holding that programmatic trades are not securities transactions. This settlement highlights the huge gap that may be developing between regulators and some of the early court decisions.” 

What’s more to it?

That being said, eToro will limit its U.S. customers to trading only Bitcoin [BTC], Bitcoin Cash [BCH], and Ethereum [ETH] on its platform.

For all other cryptocurrencies, users will have a 180-day window to sell their holdings, after which those tokens will no longer be available for trade.

This decision marks a significant shift in the platform’s crypto offerings in response to regulatory challenges. However, this move faced significant criticism, with many viewing it as an overreach by the SEC.

Commenting on the issue, Drew Hinkes, Partner at K&L Gates, shared his thoughts on X, noticing, 

Source: Drew Hinkes/X

This situation with eToro is not an isolated incident, as numerous major crypto platforms like Coinbase, Kraken, Binance, and Uniswap [UNI] have also faced legal challenges with the SEC.

While some of these battles are still ongoing, others have concluded with the SEC emerging victorious.

SEC fines report unveiled

In fact, a recent report revealed that the SEC imposed significant penalties on prominent crypto firms between 2013 and 2024, highlighting key cases and the nature of the regulatory violations committed by these companies. 

According to the report, 

“Since 2013, the SEC has levied over $7.42 billion in fines against crypto firms and individuals, of which 63% of the fine amount, i.e., $4.68 billion, came in 2024 alone.” 

Since 2022, the SEC has ramped up its efforts to regulate the cryptocurrency space, imposing penalties on firms and holding executives accountable to emphasize stricter oversight.