eToro imposes restrictions on four crypto assets identified as securities in the SEC lawsuit

eToro imposes restrictions on four crypto assets identified as securities in the SEC lawsuit

Financial trading platform eToro has issued new guidelines banning US customers from purchasing four crypto assets that were recently classified as securities by the US Securities and Exchange Commission in lawsuits against Coinbase and Binance.

While eToro did not specifically cite the securities regulator's actions as a reason for the recent changes to its crypto offering, it did emphasize the "rapidly evolving regulatory landscape." In doing so, eToro joins companies like Robinhood as the industry faces the SEC's enforcement hammer.

The latest update from eToro

According to the new one update eToro announced that starting July 12, its US customers will no longer be able to purchase Algorand (ALGO), Decentraland (MANA), Dash (DASH), and Polygon (MATIC). Customers will still have the ability to “hold and sell existing positions in these coins.”

“We remain a supporter of crypto assets and believe in the importance of providing our users with access to a diversified range of asset classes, including stocks, ETFs and options.”

Earlier this year, eToro partnered with Twitter to give the social media giant's users access to stocks, cryptocurrencies and other financial assets. However, the recent crackdown on this asset class has forced them to assess the regulatory environment in the country.

In a statement, the brokerage reiterated its commitment to working closely with global regulators to “shape the future of the crypto industry and promote access for the everyday investor.”

Increased control

This is not the first time that eToro has denied its US customers access to certain assets. Following the SEC's lawsuit against blockchain company Ripple in December 2020, eToro delisted XRP. A few months later, the company also delisted Cardano (ADA) and Tron (TRX) for “business-related considerations in the evolving regulatory environment.”

The development comes days after another prominent trading firm – Robinhood – announced plans to withdraw support for Solana (SOL), Cardano (ADA), and Polygon (MATIC).

Dan Gallagher, Robinhood's chief legal officer, recently testified before the House Agriculture Committee that the company tried to register with the SEC as a specialty digital asset broker but was shut down by the agency without proper justification, even after going through a 16-month process for the same.

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