Despite eToro’s giant status and popularity, the Philippine finance regulator would not allow unregulated crypto business.
eToro, an online trading platform, is the latest firm to find itself on the wrong side of the Philippines’ securities regulator. This follows after the Securities and Exchange Commission (SEC) of the country accused the platform of selling or offering securities without obtaining the authorization to do so.
Recall that the securities regulator had previously banned popular cryptocurrency exchange Binance from offering its services in the country. Now, however, it appears that the same fate may have just hit eToro.
In an advisory that was issued in March but publicly published on April 4, the Philippines SEC told the public that eToro’s services are not legally permitted. The regulator noted that eToro is yet to register as a corporation in the Philippines. Hence, it lacks the required operational license as provided by the Securities Regulation Code. This means that the platform has no permission to sell securities, operate as a broker-dealer, or even run an exchange where securities can be traded. That is within the Philippines. Part of the advisory reads:
“ETORO’s operations allow Filipinos to create user accounts on their platform for the purpose of investing and trading unregistered investment products.”
Philippines Warns Residents About eToro, Issues Penalties
eToro is undoubtedly a platform that resonates well with the younger generation. Founded in 2007, the multi-asset investment firm has over 33 million registered users worldwide, according to Statista.
Despite its giant status and popularity, however, the Philippine finance regulator would not allow unregulated crypto business. The watchdog has advised Filipinos to tread with caution, particularly when dealing with unregistered online investment platforms such as eToro.
To further signal its commitment to a fully regulated space, the SEC’s advisory also detailed a list of penalties for potential offenders. According to the bulletin, anyone acting as a representative, promoter, influencer, endorser, or salesperson for eToro in the Philippines is liable to penalties of up to $88,300 in fines. That is approximately 5 million Philippines pesos. There is also the possibility of a 21-year jail term for anyone caught doing any of the things mentioned above.
What Next?
For now, the SEC has only issued an advisory. However, expectations are that it would take it a step further by possibly blocking access to eToro’s website.
Recall that the same events previously played out with Binance when the SEC issued a similar advisory in November 2023. However, it wasn’t until March that the regulator instructed the national internet provider to block access to Binance’s website.
Interestingly, even as the Philippines continues to make a statement regarding its regulatory space, the eToro company website still lists the region as a supported country.
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