Sept 13 V7N - Retail trading platform eToro has reached a settlement with the U.S. Securities and Exchange Commission (SEC) and will cease offering nearly all cryptocurrencies to its U.S. customers, according to an announcement made on Thursday. The settlement includes a $1.5 million penalty for eToro, which the SEC charged with operating as an unregistered broker and clearing agency in connection with its cryptocurrency offerings.

The SEC claimed that since at least 2020, eToro allowed its U.S. customers to trade crypto assets that were deemed securities but failed to comply with federal securities law registration requirements. While the company neither admitted nor denied these findings, the settlement will affect only U.S. users.

As part of the agreement, eToro will limit cryptocurrency trading in the U.S. to just bitcoin, bitcoin cash, and ether. U.S. customers will have 180 days to sell off all other tokens. The SEC’s director of enforcement, Gurbir Grewal, praised eToro’s decision, stating it enhances investor protection and offers a path for other crypto platforms to comply with regulatory standards.

This settlement is part of the SEC's ongoing legal disputes with several cryptocurrency platforms, including Coinbase, Binance, and Kraken, which argue that crypto assets should not be classified as securities.

eToro co-founder and CEO Yoni Assia emphasized that the settlement enables the company to focus on providing innovative products and maintain regulatory compliance. The company has also been considering an initial public offering (IPO) in New York or London after scrapping a previous merger deal in 2021 valued at $10.4 billion.

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