Popular online investment trading platform eToro is in hot waters, following a warning from the Security Exchange Commission (SEC) concerning its authority to offer or sell security in the Philippines. The issue underscores the value of compliance with regulatory requirements as well as the perils of using unregistered investment platforms.
eToro makes it easier for anyone to trade without reliance on traditional financial institutions. However, the platform is not registered and compliant with the SEC. Like its ilk that promises revolution, eToro supports crypto exchange and supports the trading of more than 30 cryptocurrencies as well as platforms for trading currencies, commodities, indices, some select range of stocks, and exchange-traded funds (ETFs).
Despite other jurisdictions seeing eToro as a registered broker, questions of its legality are present in the Philippines. This led security watchdogs to publicly declare the platform as lacking the necessary documents and permissions to offer its services legally in the country.
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Warnings against eToro go as far back as April 2023 when the SEC explicitly announced to the public not to invest in the platform’s schemes. Alongside it, other trading platforms such as SparkFX Bitcore, Ate Anna’s Retail and Wholesale Online Shop, Sandalwood Capitals Financial Advisory Service, and XM are also warned against.
Said platforms share a common issue of not following the Securities Regulation Code (SRC), which is aimed at safeguarding investors from fraudulent financial schemes.
According to the SEC advisory, eToro has an active presence on social media where it attracts users on a global scale.