The Israeli investment company, eToro, has now settled with the United States Securities and Exchange Commission (SEC) regarding a lawsuit that targeted its unregistered securities offered on its platform. The company will pay a $1.5 million penalty to the SEC, and alongside this, it will also shut down almost all of its crypto trading services for the region, as part of the settlement.
It was revealed that its massive operations offering crypto since around 2020 did not comply with the United States federal securities laws.
eToro Settles $1.5M to the SEC, Shuts Down Most Crypto Trading
Aaron Davidson/Getty Images for eToro.Art
The Commission shared a press release earlier today which details that its lawsuit against eToro has now reached a settlement where the company will pay $1.5 million. This stems from its complaint against eToro where it was chargedwith operating as an unregistered broker and clearing agency for its crypto asset trading platform in the United States.
It was said by the SEC that eToro allowed trading securities on its platform despite not being eligible to do so.Moreover, the SEC revealed that throughout the years, eToro failed to comply with the registration provisions under thefederal securities law.
With that, eToro announced that it would only offer several coins available to trade on its platform as it also shut down most of its trading operations as part of the settlement.
What Will Happen to eToro's United States Operations?
This settlement agreement brings eToro to change a lot for its continued United States operations, with only three crypto assets allowed to be traded on the platform. According to the SEC, this includes Bitcoin, Bitcoin Cash, and Ether only.
It was revealed by eToro that these available coins comply with the regulatory framework it has.
SEC's Run-ins with Crypto Companies
The SEC is known for its iron hand in upholding the law and regulating the young digital assets in the industry, crypto, especially with the present's massive adoption and use of the blockchain. It was only last year when the SEC fought against the largest cryptocurrency platform in the world, Binance, and it was able to successfully prosecute its CEO, CZ Zhao, who is now in jail.
The regulatory agency has had its run-ins with cryptocurrency for many years now, targeting fraudulent tactics, unregistered securities, and dubious operations throughout the years. Humongous crypto scams have also been the target of the SEC, with last year's lawsuit against Hex Crypto and its founder, Richard Schueler, claiming that they engaged in fraudulent and misleading campaigns.
However, the work for The Commission did not stop there, as it still focused on its efforts towards crypto regulation and filing suits against 'Big Crypto' companies like Coinbase.
eToro has seen its fair share of scrutiny with the government, with this run-in with the SEC leading to a significant settlement by the Israeli company, alongside most of its operations shut down in the US.
