Key Points
- The Philippines’ Securities and Exchange Commission (SEC) accuses eToro of selling unregistered securities.
- eToro may face penalties and possible website blockage, similar to what happened with Binance.
Online trading platform, eToro, has been accused by the Philippines’ SEC of offering unregistered securities without the necessary authorization.
This development comes after the regulatory body had previously banned cryptocurrency exchange Binance from providing its services in the country.
Accusations Against eToro
An advisory issued in March and made public on April 4, states that eToro’s services are not legally permitted in the Philippines. The SEC pointed out that eToro has not registered as a corporation in the country and therefore lacks the necessary operational license under the Securities Regulation Code. This means eToro is not authorized to sell securities, operate as a broker-dealer, or run an exchange where securities can be traded in the Philippines.
The advisory stated, “ETORO’s operations allow Filipinos to create user accounts on their platform for the purpose of investing and trading unregistered investment products.”
Warnings and Penalties
Despite its popularity, particularly among the younger generation, and its 33 million registered users worldwide, eToro is facing resistance from the Philippine finance regulator. The regulator has cautioned Filipinos to be wary when dealing with unregistered online investment platforms such as eToro.
The SEC’s advisory also outlined penalties for potential offenders. Representatives, promoters, influencers, endorsers, or salespeople for eToro in the Philippines could face fines of up to $88,300, or approximately 5 million Philippines pesos, and a potential 21-year jail term.
What Lies Ahead?
At this time, the SEC has only issued an advisory. However, it is expected that further action may be taken, including potentially blocking access to eToro’s website.
This situation mirrors the SEC’s previous actions against Binance in November 2023. It wasn’t until March that the regulator instructed the national internet provider to block access to Binance’s website.
Despite these regulatory challenges, eToro’s company website still lists the Philippines as a supported country.
