Social trading platform eToro is launching today in the U.S., opening up its crypto trading and wallet capabilities to people across 30 states and two territories. Users in these states will be able to trade 13 different cryptocurrencies on the platform—bitcoin, ether, Bitcoin Cash, XRP, Dash, Litecoin, Ethereum Classic, Cardano, IOTA, XLM, EOS, NEO, and Zcash.
Prior to its U.S. launch, eToro has been operating as a broker-dealer in the U.K., Europe, Australia, and South Africa, letting users trade stocks, commodities, ETFs, and cryptocurrencies. On the platform, users can “copy” the trades of other people they think are doing a savvy job, either manually by following their moves or setting up an automated trade copy. While eToro has about 10 million registered users, cofounder and CEO Yoni Assia tells us that close to 40 or 50 percent of the platform’s “active traders” trade crypto.
At launch, U.S. traders will only be able to trade cryptocurrencies on eToro—they won’t have access to the commodities and ETFs that people can trade on the platform in other countries (Assia says he’ll be adding additional markets to the U.S. platform “around Q4” this year). Upon signing up, users will get automatic access to “100,000 dollars in virtual money,” says Assia—play money with which new traders can experiment on the platform. eToro has plans for bringing in additional cryptocurrencies soon.
“We’ll be adding the entire top 20 [cryptocurrencies] into the platform,” Assia says, indicating the top 20 coins usually listed on Coinmarketcap. Certain “regulatory constraints” have limited eToro from providing all 20 at launch, but the company’s working on adapting to U.S. regulations to make the remaining few available.
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Overall, however, Assia has found that regulations in the U.S. are “generally very similar” to the other places where eToro’s been operating with crypto. The company just had to get the appropriate FinCEN (the U.S. Treasury Department’s Financial Crimes Enforcement Network bureau) and money transfer licenses, he says. Assia didn’t provide any particular reason why eToro has yet to launch in certain U.S. states, though one of the states it won’t be coming to immediately is New York, where anyone holding cryptocurrency or operating like an exchange is required to obtain a BitLicense (which is notoriously hard to obtain).
EToro is set to launch eToroX, a global crypto-to-crypto exchange, “at the beginning of Q2,” says Assia. The exchange will not only include cryptocurrencies, but also tokenized versions of eToro’s existing, non-crypto offerings, like fiat currencies and commodities. As Assia describes it, the exchange’s plan is to essentially create stablecoins corresponding to those assets that people can exchange directly for crypto.
Investors in eToro come from all over the world. Spark Capital, a VC firm based in Boston, has been investing since 2012, and eToro’s latest funding round was dominated by investors in Hong Kong, Japan, South Korea, and France. “We operate in more than 120 countries within the fintech and crypto spaces,” says Assia, “so I think a lot of both financial institutions and investors from countries where we operate are interested in getting visibility into what we do.”