The Securities and Exchange Commission (SEC) of the Philippines has recently issued a warning against the popular online trading platform eToro, stating that it is not authorized to sell or offer securities in the country. The advisory, which was released in March and made public on April 4, cautions the public against using eToro’s services for investment purposes.
According to the SEC, eToro allows Filipinos to create user accounts on their platform to invest and trade unregistered investment products. However, the firm is not registered as a corporation in the Philippines and lacks the necessary licenses and authority required by the Securities Regulation Code to engage in securities trading, act as a broker-dealer, or operate a securities exchange in the country.
eToro, founded in 2007, is a multinational trading company that has gained popularity among Millennials. With over 33 million registered users worldwide, eToro is a multiasset investment firm that operates in 140 countries and had a valuation of $3.5 billion in 2023.
Despite its multinational status, the Philippine finance regulator advises the public to exercise caution when dealing with unregistered online investment platforms like eToro and their representatives. The SEC bulletin warns that individuals acting as salespeople, promoters, influencers, endorsers, or agents for eToro in the Philippines could face severe penalties, including fines of up to $88,300 (5 million Philippines pesos) or imprisonment for up to 21 years for violating securities laws.
Interestingly, eToro’s website currently lists the Philippines as a supported country, suggesting a discrepancy between the platform’s claims and the SEC’s advisory.
Cointelegraph reached out to eToro for clarification, but no immediate response was received.
This is not the first time the SEC has issued such a warning. In November 2023, the regulatory body issued a similar advisory against crypto exchange Binance, stating that it was not authorized to sell or offer securities to the public. In addition, the Philippines National Telecommunications Commission (NTC) began blocking cryptocurrency company websites without the necessary licenses in March. The SEC subsequently instructed the national internet provider to block access to Binance’s website, citing concerns about the security of investors’ funds.
Overall, the SEC’s advisory serves as a reminder for investors to exercise caution and thoroughly research the legitimacy of online investment platforms and their compliance with local regulations before engaging in any financial transactions.