eToro settles with SEC for $1.5 million and agrees to significantly pare back its crypto arm

Financial services company eToro has agreed to pay $1.5 million to settle the U.S. Securities and Exchange Commission's charges that it operated unlawfully as a broker and clearing agency connected to its crypto business.

eToro, without admitting or denying the SEC's findings, agreed to make a select set of crypto available for trading, including bitcoin, Bitcoin Cash and ether, according to a statement released by the SEC on Thursday.

“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 S. Grewal, Director of the SEC’s division of enforcement in the statement. “The $1.5 million penalty reflects eToro’s agreement to cease violating applicable federal securities laws as it continues its U.S. operations.”

As part of the settlement, eToro agreed to sell all of its other crypto in the next 180 days.

Yoni Assia, eToro’s Co-founder and CEO, said the settlement will have a small impact on the firm's global operations.

"Outside of the United States, eToro users will continue to enjoy access to over 100 cryptoassets. As a global, multi-asset trading and investing platform we continue to experience strong growth and remain committed to becoming a public company in the future," Assia said in a statement.

Assia said it was vital for eToro to be compliant and work with regulators.

"We now have a clear regulatory framework for cryptoassets in our home markets of the UK and Europe and we believe we will see similar in the US in the near future," Assia added. "Once this is in place, we will look to enable trading in the cryptoassets that meet this framework.”

eToro will specifically no longer support trading in AAVE, ALGO, BAT, ADA, LINK, COMP, DASH, MANA, DOGE, ENJ, EOS, ETC, MIOTA, LTC, MKR, NEO, MATIC, XRP, XLM, SHIBxM, XTZ, TRX, UNI, YFI and ZEC, an eToro spokesperson confirmed in an emailed statement to The Block.

Customers don’t have to sell their holdings, the spokesperson said.

“Only those positions that cannot be transferred to the wallet will be liquidated on March 18, 2025. This represents less than 3% of the total dollar value of US customers’ cryptoassets,” they added.

Before March 11, users can close their crypto positions or transfer those to the eToro wallet for coins that are supported, eToro said. Mostly, no action is required from U.S. users.

"On March 18, 2025, any remaining open positions in cryptoassets other than BTC, BCH and ETH and those not supported by the wallet at the time will be liquidated and the proceeds transferred to users’ available cash balance in their investment accounts," the firm said.

Chief Legal Officer Paul Grewal criticized the SEC’s move on Thursday and said the SEC acknowledged that Ether is not a security. Whether Ether is a commodity or a security has been a longstanding issue.

“They just conceded ETH is not offered as an investment contract security in secondary markets. But @SECGov will not explain why ETH and BTC but no others--because they can’t,” Grewal said in a post on X. “There is no plan, no framework, no logic, no due process, and certainly no respect for the law.”

The SEC has been cracking down on firms it believes are operating unlawfully as brokers, exchanges and clearing agencies. The agency has brought charges against big-name exchanges including Binance and Coinbase. The SEC also sent a Wells notice to Robinhood Crypto earlier this year, signaling that an enforcement action could be coming.

Update: Sept. 12, 2:00 p.m. UTC to include details throughout 

Update: Sept. 12, 3:30 p.m. UTC to include details throughout