The eToro investment platform, which also operates on the Czech market, is facing increasing pressure from regulators in the US.
In response to this situation, it has decided to to restrict trading in cryptocurrencies, but the restriction applies only to US users for now. This information was published by Reuters. The US Securities and Exchange Commission (SEC) also announced that the platform will have to pay a fine of $1.5 million, which is equivalent to about 34 million crowns.
The action came after eToro was accused of allowing trading in certain cryptocurrencies without the required registration under US securities laws. The SEC said that eToro agreed to cease trading activities in this area. As a result, U.S. users of the platform will continue to be able to trade only a limited number of cryptocurrencies, specifically bitcoin $BTCUSD+2.1%, bitcoin cash $BCHUSD+4.8% and ethereum $ETHUSD+4.0%, which are all permitted cryptocurrencies according to the SEC.
The issue between eToro and the SEC arose because the platform allowed trading in cryptocurrencies that the SEC classifies as securities, even though eToro failed to meet the requirements for registration.
Reuters, which has been following the case, quoted the SEC as saying that most cryptocurrencies should be considered securities and subject to appropriate regulation. Firms in the cryptocurrency sector, including eToro, often reject this view, arguing that cryptocurrencies should be regulated differently than traditional securities.
The eToro fine is another example of U.S. regulators' efforts to tighten oversight of the rapidly growing cryptocurrency market. For investors and the companies themselves, this means they will have to increasingly adapt to new legal rules and expect further intervention from regulators.
Whether this move by the SEC will lead to further action against other platforms or a change in the legal framework for cryptocurrencies in the US remains unclear. What is certain, however, is that regulatory uncertainty remains and has a significant impact on investors and the future development of the overall cryptocurrency market.
What are your thoughts on this move by the SEC and the regulation of the cryptocurrency market in general?
I can understand this regulation, but other regulations that have already been passed are often nonsense and just want to stop something new from succeeding.
For cryptocurrencies, less regulation makes sense to me. Cryptocurrencies haven't been around that long and it's still a pretty risky thing, so I understand the regulations.
With SEC cryptocurrencies, I guess this is just normal.
Regulations have arrived in the US :)