Trading giant eToro has settled an agreement with the U.S. Securities and Exchange Commission (SEC). The charges stating the platform operated as an unregistered broker and clearing agency while also facilitating transactions in cryptocurrencies regarded as securities resulted in a $1.5 million fine. Going forward, eToro will restrict its digital trading capacity to bitcoin (BTC), bitcoin cash (BCH), and ether (ETH).
Though eToro’s market influence within the U.S. is substantially smaller than other operators, with the platform only encompassing 240,000 customer accounts as opposed to Coinbase’s 100 million, legal experts have noted that the agreement provides insight into the SEC’s perspective on which cryptocurrencies should be identified as securities.
Legal responses from digital asset-focused attorneys have indicated that the settlement suggests at least BTC, BCH, and ETH are perceived by the SEC as commodities rather than securities. However, the agreement specifies little about which digital assets the SEC alleged as being involved in securities transactions or eToro’s motivations for settling the case.
Joshua Ashley Klayman of Linklaters advises caution, as there is minimal information provided about which specific digital assets the SEC considered to be securities. Furthermore, he reiterates that the existence of this cease and desist order may not impact on any current or future lawsuits, as none of the initial allegations were proven during this process.