eToro to limit cryptocurrency trading in US after $1.5 million SEC settlement

The SEC has reached an agreement settlement with trading platform eToro, requiring the company to restrict cryptocurrency trading for US customers to bitcoin, ethereum, and bitcoin Cash only.

Under the settlement announced Thursday, eToro will pay a $1.5 million fine to resolve allegations that it operated as an unregistered broker and clearing agency. The Tel Aviv-based firm's U.S. branch will give customers 180 days to sell any crypto assets that are not included in the three permitted cryptocurrencies.

The settlement significantly reduces eToro’s cryptocurrency offering for U.S. users, as the platform currently lists over 100 different tokens, including popular coins such as XRP, Solana, and Polygon. SEC Enforcement Director Gurbir S. Grewal stated that by removing tokens offered as investment contracts, “eToro has chosen to comply with and operate within the established regulatory framework.”

eToro CEO Yoni Assia downplayed the impact, saying the deal would minimally affect the firm’s business and that non-US users can still access all of its crypto trading options. He expressed optimism about future cryptocurrency regulations in the US, noting: “We now have a clear regulatory framework for crypto assets in our home markets of the UK and Europe and we believe we will see something similar in the US in the near future.”

SEC's crackdown on cryptocurrencies continues

The eToro settlement is a continuation of the SEC’s campaign against cryptocurrency exchanges that has been underway over the past year. The agency has filed lawsuits against major exchanges Binance, Coinbase, and Kraken, and has also notified Robinhood of a potential enforcement action related to its cryptocurrency business. This regulatory pressure extends beyond exchanges to other cryptocurrency projects such as Tron, OpenSea, and Consensys, among others.

Notably, the agreement allows eToro to continue offering ethereum trading to US customers, despite earlier indications from the SEC that it may consider Ether an unregistered security. This coincides with the agency’s recent approval of spot Ether exchange-traded funds, signaling a shift in its stance on the second-largest cryptocurrency by market value.