eToro Launches Crypto Trading in New York Three Years After BitLicense Approval

Trading platform eToro (Nasdaq: ETOR) has begun offering cryptocurrency trading to its New York clients more than three years after receiving a BitLicense from the New York State Department of Financial Services in February 2023.

The firm will initially list approximately 20 tokens in the state, with plans to expand the offering and add staking services, marking the completion of its US regulatory footprint across 48 states.

eToro Activates BitLicense with Initial 20-Token Offering and Staking Plans

eToro received its Virtual Currency Business Activity License (BitLicense) in February 2023, becoming the first firm to obtain the license following the collapse of FTX, according to Andrew McCormick, Head of eToro US. The firm has since been working with New York regulators to develop a business plan and product offerings compliant with state requirements.

The platform will begin with approximately 20 crypto assets in New York, compared to the 115 tokens available to clients in the 47 other US states and 74 countries where eToro operates. McCormick stated that the firm plans to add staking services in New York and is in active discussions with regulators about the necessary product updates.

eToro’s launch in New York required both a BitLicense and a Money Transmitter License, which the firm secured following its regulatory engagement. In 2024, eToro settled with the Securities and Exchange Commission for $1.5 million over allegations of acting as an unregistered broker-dealer and clearing agency, which led the company to remove most crypto from its US platform and renegotiate its regulatory stance.

BitLicense Approval Process Extended by Post-FTX Regulatory Scrutiny

McCormick noted that the firm was near the finish line for its BitLicense application when FTX collapsed in late 2022, which significantly increased regulatory scrutiny and diligence. He expressed pride in meeting the tough standards based on eToro’s long history, focus on compliance and anti-money laundering controls, and customer protection.

Since the BitLicense framework was introduced in 2015, fewer than 40 firms have received approval, and not all have activated their licenses to operate in New York. Some firms, including Kraken, have chosen to eschew the state entirely rather than comply with the licensing requirements.

McCormick acknowledged that the firm did not expect the three-year gap between receiving the license and launching services, stating that the firm had initially hoped to launch within the year of receiving approval. He cited the post-FTX regulatory environment and the firm’s focus on its initial public offering in 2025 as factors that influenced the timing.

eToro Operates in 48 US States with Support for Federal Crypto Legislation

With the New York launch, eToro now offers crypto trading in 48 US states, with Hawaii and Nevada remaining the only states where the firm does not provide crypto services due to heightened regulatory scrutiny. The platform supports over 40 million registered users across 75 countries.

McCormick expressed support for federal crypto legislation such as the CLARITY Act, which would establish broad market structure guidelines and assign specific oversight roles to the SEC and CFTC. He stated that he would prefer B-plus legislation over the current framework of 50 different state standards, securities laws from the 1930s, guidance subject to political change, and a 1946 Supreme Court case about orange trees.

The CLARITY Act and related Senate drafts have faced delays as lawmakers and lobbyists debate details including stablecoin yield provisions and jurisdictional boundaries between federal regulators.

FAQ

When did eToro receive its New York BitLicense and why did it take three years to launch?

eToro received its BitLicense from the New York State Department of Financial Services in February 2023. The three-year gap between approval and launch was attributed to increased regulatory scrutiny following the FTX collapse, the need to develop compliant business plans, and the firm’s focus on its initial public offering in 2025.

What crypto services will eToro offer in New York?

eToro will initially offer trading in approximately 20 crypto assets, with plans to expand the token offering over time and add staking services. The firm is working with regulators on the necessary product updates to enable staking in the state.

How does eToro view federal crypto legislation like the CLARITY Act?

eToro US Head Andrew McCormick expressed support for federal crypto legislation, stating that a federal framework would be preferable to the current patchwork of 50 different state standards and outdated securities laws. The CLARITY Act, if passed, would establish market structure guidelines and assign oversight roles to the SEC and CFTC.