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The SEC has settled with eToro on its lawsuit that the exchange offered unregistered securities to US investors.
Israel-based trading platform eToro has agreed to new terms in its settlement with the US Securities and Exchange Commission (SEC). In a press release on Thursday, the Wall Street top regulator stated that eToro would refrain from selling unregistered securities to US investors and pay a legal fine of $1.5 million.
eToro agreed with the SEC to offer limited cryptocurrency assets to its US users in an effort to comply with federal securities laws. The exchange would now allow US residents to trade only Bitcoin, Ethereum, and Bitcoin Cash.
Per the Thursday report, the Gary Gensler-led federal regulator alleged that eToro had offered unregistered securities to US investors for at least four years without due registration. Hence, the regulator filed a lawsuit against the exchange.
180-day Period
eToro agreed it would give US users up to 180 days after the SEC order to withdraw assets other than the four aforementioned cryptocurrencies. The exchange would automatically liquidate any unconverted assets after 187 days and send them to the affected customers.
Notably, eToro didn’t agree with or deny that it offered unregistered securities to US investors. Rather, the trading platform opted to pay a $1.5 million fine.
Clear Securities Message?
Including certain assets as tokens eToro could offer US residents may have sent a clear message about the SEC’s position on which cryptocurrency is a security.
The SEC allowing eToro to continue offering Ethereum may all but conclude that the regulator views the second-largest cryptocurrency as a commodity. The Ethereum Foundation announced in June that it received a notification from the SEC that it was closing its investigation on whether Ether was a security.
A notable omission from the list of assets eToro could offer was XRP. Ripple won a case against the SEC on whether XRP was a security in August. The court ruled that the XRPL native token was not a security in itself, but offering XRP to institutional traders constituted the sale of unregistered securities.
The omission could signal that the SEC is not satisfied with the ruling and could appeal the decision. The Crypto Basic reported that the US top regulator has until October 6 to contend with the outcome of the legal loggerhead with Ripple.