These assets include bitcoin (BTC), bitcoin cash (BCH) and ether (ETH). eToro agreed to pay a $1.5 million penalty to resolve allegations that it operated as an unregistered broker and clearinghouse, intermediary to trade certain crypto assets as securities.

eToro will cease practices that violate federal securities laws and will only offer a limited range of crypto assets to U.S. customers, the SEC said Thursday.

In the statement, it was stated that since 2020, eToro has offered US customers the opportunity to trade crypto assets considered as securities and did not comply with the registration provisions of federal laws.

However, what is noteworthy is that the SEC did not clarify which tokens eToro considers to be securities. This uncertainty stands out as one of the main tensions between the regulator and the crypto industry.

Although the SEC has described some crypto assets as securities in past cases, it still has not provided a definitive definition of crypto assets. This creates significant uncertainty in the industry, especially regarding which tokens fall under the SEC’s jurisdiction.

The SEC has increased its pressure on crypto companies in recent years. The Ripple case is one of the most well-known examples of this process. The SEC filed a lawsuit in 2020, arguing that Ripple’s XRP token should be considered a security.

In August 2023, a federal court ruled that Ripple violated federal securities laws with its direct sale of XRP to institutional customers, fining the company $125 million. However, this penalty was only a small fraction of the $2 billion penalty the SEC requested.

Following this case, the SEC also accelerated its enforcement actions against other major crypto platforms. Coinbase has been one of the SEC’s targets. The SEC has taken legal action against Coinbase for allegedly intermediating crypto asset securities transactions and violating federal securities laws. In March, the court ruled that the SEC was justified in its claims.

In addition, the SEC filed a lawsuit against Binance with similar accusations in 2023. Binance founder Changpeng “CZ” Zhao admitted to the accusations and subsequently resigned from his position as CEO. Zhao was replaced by Richard Teng. The Binance case is seen as a significant example of regulatory pressure in the crypto industry and demonstrates the SEC’s commitment to the industry.

The ETH issue continues to be a matter of debate. While the Commodity Futures Trading Commission (CFTC) and much of the crypto industry argue that ether is a commodity, the SEC has refrained from taking a clear stance on the issue.

However, at least one SEC-registered brokerage firm has initiated a custody operation of the asset, treating ether as a security. This indicates that tensions between the SEC and other regulatory agencies continue. Uncertainties regarding regulations in the crypto industry attract the attention of those who continue to monitor the sector closely.