Crypto exchange eToro has agreed to pay $1.5 million to settle with the SEC. The company was charged with operating as an unregistered broker and clearing agency by allowing trades of certain crypto assets classified as securities.
As part of the settlement, eToro will stop offering a wide range of crypto assets to U.S. users and will limit its platform to Bitcoin, Bitcoin Cash, and Ether.
The SEC’s order points out that since at least 2020, eToro allowed American customers to trade crypto assets, but failed to comply with federal securities registration rules.
eToro has announced that all other crypto assets must be sold off by its U.S. customers within 180 days of the order.
As per usual, the SEC has been busy in the crypto industry, targeting big names like Coinbase and Binance. The regulator has filed lawsuits against so many companies involved in DeFi and NFTs.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said that eToro’s decision to remove tokens from its platform shows its commitment to coming into compliance with the SEC’s framework. He added that:
“By removing tokens offered as investment contracts from its platform, eToro has chosen to come into compliance and operate within our established regulatory framework.”
The SEC’s aggressive approach is being felt across the entire crypto industry. Firms have to deal with increasing pressure to comply with complex regulations.
Many are now facing skyrocketing compliance costs as they try to meet the SEC’s standards.
For smaller players in the crypto market, this could be devastating. Meeting these regulatory standards requires time, money, and expertise, which smaller firms may not have.
This has already led to some consolidation in the industry, with smaller companies being bought out by larger companies that have the resources to comply with the law.
