The United States SEC has never played the role of financial sheriff in the crypto Wild West as it does now. Constant reminders, they let nothing slip by. The latest victim? eToro, accused of operating as a broker without a license, must drastically reduce its crypto offerings for American clients. A look back at a hefty fine and the imposed changes on the platform.

The SEC Strikes Hard and eToro Bows Down

Since 2020, the SEC, which is currently investigating OpenSea, has been watching eToro and its crypto trading practices in the United States with a vigilant eye. The verdict? The axe falls: eToro was operating illegally as a broker and clearing agency, all without a single license. A true cowboy of crypto trading, one might say!

The SEC’s argument: some crypto assets offered by eToro are considered securities, therefore subject to current regulations.

eToro, caught red-handed, had no choice but to bow to the authority of the securities regulator. The result? The platform agrees to pay a fine of 1.5 million dollars and commits to significantly reducing the available cryptos for U.S. traders.

• Since 2020, eToro allowed crypto asset trading without following the law;
• A fine of 1.5 million for violating securities law;
• Only three cryptos will remain available for U.S. clients: Bitcoin, Bitcoin Cash, and Ethereum.

The SEC, with this decision, sends a strong message to other platforms: follow the law or face the consequences.

As Gurbir S. Grewal, Director of the SEC’s Enforcement Division, stated:

“This resolution offers a pathway for other crypto intermediaries to comply with the established regulatory framework“.

The Major Cleanup in eToro’s Crypto Offering

The SEC’s decision has direct repercussions on eToro’s crypto offering. Gone are the multiple altcoins once available to American clients. In the future, only Bitcoin (BTC), Bitcoin Cash (BCH), and Ethereum (ETH) will be offered. A limited choice that might drive away some users accustomed to variety. But what can be done against the SEC?

The platform allows its users to sell their other cryptos within 180 days. After this period, these assets will be liquidated and the gains returned to the users. This spring cleaning in the middle of autumn clearly illustrates the SEC’s strategy: to clean up the crypto trading markets to bring order.

eToro will now have to deal with a much more limited offering in the United States. A tough blow for the platform, which has built part of its success on its diversity of assets.

The consequences for the U.S. crypto market remain to be seen, but it is certain that regulation continues to tighten, leaving little room for the reckless. In this fraud-hunting atmosphere, eToro is under close surveillance. With 4.68 billion dollars in fines in 2024, the SEC plays the role of hungry wolves, and crypto platforms must stay on their toes.