The U.S. Securities and Exchange Commission (SEC), said trading platform eToro USA LLC has agreed to pay a $1.5 million penalty for operating as an unregistered broker and clearing agency.
In an announcement, the SEC said eToro had been operating as a broker and clearing agency since at least 2020, providing U.S. customers with the ability to trade crypto assets that were being offered and sold as securities.
At the time eToro did not comply with the federal registration requirements for brokers and clearing agencies. The SEC said eToro’s platform allowed transactions in crypto assets that met the definition of investment contracts, meaning they should have been registered as securities.
Platform to Limit Range of Crypto Assets Traded
Going forward, eToro will limit the range of crypto assets available for trading on its platform.
eToro announced that U.S. customers will only be able to trade Bitcoin, Bitcoin Cash, and Ether. These crypto assets are widely considered not to be securities under current U.S. law.
All other crypto assets will be phased out, with customers having 180 days to sell those assets following the SEC’s order. eToro will liquidate any remaining crypto assets that are not able to be transferred to customers, returning the proceeds to them.
“By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework. This resolution not only enhances investor protection, but also offers a pathway for other crypto intermediaries,” said Gurbir Grewal, director of the SEC’s division of enforcement.
“The $1.5 million penalty reflects eToro’s agreement to cease violating applicable federal securities laws as it continues its U.S. operations,” said Grewal.
Source: cryptonews.com