The Securities and Exchange Commission (SEC) of the Philippines has issued an advisory warning against the online trading platform eToro, marking another significant move by the regulator following its previous actions against Binance. The SEC’s advisory, made public on April 4, underscores eToro’s lack of authorization to offer or sell securities within the Philippines, highlighting the platform’s operation without the necessary local registrations and licenses.
eToro’s Legal Standing in the Philippines
According to the SEC’s advisory from March, eToro has been operating in the Philippines without the required corporate registration and has not obtained the licenses needed under the Securities Regulation Code. This includes permissions to sell securities, function as a broker-dealer, or manage a securities trading exchange in the country. The SEC’s announcement is a caution to the public against investing through eToro’s platform, which allows users to trade in unregistered investment products.
eToro’s Global Presence
eToro, established in 2007, has grown into a multi-asset investment firm popular among millennials, boasting over 33 million registered users globally as per Statista data. Valued at $3.5 billion in 2023, eToro operates in 140 countries, including the Philippines, listed on its website as a supported country.
Penalties for Representation
The SEC’s bulletin also mentions potential penalties for any individuals in the Philippines acting as salespeople, promoters, influencers, endorsers, or agents for eToro. Violations of securities laws could result in fines up to $88,300 (5 million Philippine pesos) or imprisonment for up to 21 years.
eToro’s Response and Previous SEC Actions
As of the time of reporting, eToro had not provided a response to the advisory. This development follows a pattern of increased scrutiny by the Philippine SEC on cryptocurrency exchanges and online trading platforms, including a notable advisory against Binance in November 2023 for similar reasons. In March, the Philippines National Telecommunications Commission (NTC) started to block websites of crypto companies operating without the necessary licenses, with the SEC directing the blockage of Binance’s website later that month.
