eToro, a trading platform that provides access to both stock and cryptocurrency markets, has announced that it will restrict access to certain cryptocurrency positions for US users. The decision comes as a result of regulatory concerns in a rapidly evolving landscape.
Details of the Restriction
According to an email shared with CryptoSlate on June 12, eToro will not allow US users to open new positions in Algorand (ALGO), Decentraland (MANA), Dash (DASH), and Polygon (MATIC) after 6:00 a.m. ET on July 12, 2023. However, US customers will still be able to hold and sell positions in these assets if they already have them. Non-US customers will not be affected by the change.
Reasons for the Restriction
eToro cited regulations as the reason for its decision. It stated that it has acted due to “recent developments” in a rapidly evolving regulatory landscape. Although eToro did not specify which regulatory developments were the cause of concern, all four affected cryptocurrencies were named in lawsuits that the US Securities and Exchange Commission (SEC) filed against Coinbase and Binance on June 5, 2023.
eToro’s Business Model
eToro is classified as a trading platform that functions differently from most standard cryptocurrency exchanges. While exchanges offer direct trading of cryptocurrencies, eToro allows users to close open cryptocurrency positions and withdraw their balance in cash or cryptocurrency.
The restriction by eToro is a major development in the cryptocurrency market, especially as the regulatory landscape is rapidly evolving. It is likely that other trading platforms will follow suit, and cryptocurrency investors must be aware of the changing regulatory landscape.