eToro halts purchase of cryptocurrencies as SEC labels tokens unregistered securities

Social trading platform eToro has announced the suspension of cryptocurrency purchases for US users, specifically targeting four tokens recently deemed unregistered securities by the US Securities and Exchange Commission (SEC).

eToro US took this decision due to what they describe as an “evolving regulatory landscape.” The platform, however, said that users can still retain and sell their existing cryptocurrency holdings.

“We at eToro have implemented a comprehensive framework to assess the crypto assets we offer, considering the rapidly changing regulatory environment. Recent developments have necessitated adjustments to our crypto offering for US customers,” the company stated.

While eToro did not explicitly specify the exact developments that led to this decision, it is worth noting that the delisted tokens were mentioned in the SEC’s lawsuits against major exchanges Binance and Coinbase last week. In these charges, the regulatory body referred to the tokens as securities requiring registration.

According to eToro’s tweet, US customers will no longer be able to initiate new positions in Algorand (ALGO), Decentraland (MANA), Dash (DASH), and Polygon (MATIC). However, customers can still retain and sell their existing holdings of these coins.

eToro stressed its ongoing support for crypto assets and the importance of providing users with access to a wide range of asset classes. The brokerage also expressed its commitment to collaborating with regulatory bodies.

While eToro has chosen to delist certain cryptocurrencies to comply with the SEC, Coinbase has taken a different stance. The exchange has vowed to continue with its operations as usual, placing blame on the SEC for adopting an “enforcement-only approach.”

As the regulatory landscape surrounding cryptocurrencies continues to evolve, eToro’s decision reflects the challenges faced by platforms operating within the United States.