The Securities and Exchange Commission (SEC) in the Philippines has declared that the retail trading platform eToro is not authorized to sell or offer securities to the public in the country. Despite being a registered broker/dealer in several jurisdictions, eToro does not meet the necessary requirements to sell securities in the Philippines. With over 30 million users globally, eToro is known for its popularity in the UK, Europe, the U.S., and Australia, allowing users to trade over 90 cryptocurrencies. The SEC emphasized that eToro is operating without the required license in the Philippines, which is mandatory for selling or offering securities to the public.
In response to eToro’s unauthorized activities in the Philippines, the SEC warned that individuals representing the platform, such as brokers, dealers, promoters, recruiters, and influencers, may face criminal liability under the Securities Regulation Code (SRC). These individuals could be penalized with a maximum fine of Five Million Pesos or imprisonment of up to 21 years. The commission also highlighted the importance of adhering to regulatory requirements and obtaining the necessary licenses before engaging in the sale or offer of securities in the country. The SEC’s announcement serves as a reminder to all entities operating in the financial market to comply with the legal framework set by the regulatory body.
In a similar regulatory move, the Philippines SEC announced plans to block local access to the crypto trading platform Binance in March. This decision was made due to Binance’s alleged offering of investment and trading opportunities in the country without obtaining the required license from the commission. The SEC intensified its ban on Binance by urging Google and Meta to block all marketing campaigns related to the crypto exchange in the Philippines. These regulatory actions demonstrate the commission’s commitment to enforcing compliance with securities laws and protecting investors from unauthorized activities in the crypto market.
Media reports in February suggested that eToro is considering an initial public offering (IPO) with a valuation of more than $3.5 billion, potentially listing in the U.S. as its destination. The IPO plans indicate eToro’s strategic move to expand its reach and raise capital through a public offering. However, the regulatory challenges faced by eToro in the Philippines and other jurisdictions highlight the importance of navigating the regulatory landscape before expanding operations in new markets. As eToro evaluates its IPO options, regulatory compliance will be a key factor in determining its success in launching as a publicly traded company.
The unauthorized activities of eToro and the regulatory hurdles faced by Binance in the Philippines underscore the importance of adhering to regulatory requirements in the financial market. The SEC’s actions against these platforms serve as a reminder to all market participants to comply with securities laws and obtain the necessary licenses to operate legally. As the crypto market continues to evolve, regulatory oversight will play a crucial role in maintaining market integrity and protecting investors from potential risks. Compliance with securities regulations is essential for fostering a transparent and secure financial environment for all participants in the market.
The SEC’s announcement regarding eToro’s unauthorized activities in the Philippines is a part of the commission’s efforts to safeguard the interests of investors and maintain the integrity of the financial market. By enforcing regulatory requirements and penalizing entities that operate without the necessary licenses, the SEC aims to promote trust and confidence in the securities market. As eToro and other platforms navigate regulatory challenges, adherence to securities laws will be essential for sustainable growth and compliance with legal requirements. The regulatory landscape in the Philippines and globally will continue to evolve, emphasizing the importance of regulatory compliance for all entities operating in the financial market.
