The Philippine Commission on Securities and Exchange has released a regulatory statement regarding the online portfolios of eToro, warning investors of potential financial losses. This development is in line with similar actions taken by other cryptocurrency exchanges, such as Binance, which is set to be replaced by November 2023. The Securities and Exchange Commission (SEC) of the Philippines made the announcement on April 4, clarifying that eToro is not covered by local legislation governing the purchase and sale of stocks within the country.
Unauthorized operations and regulatory concerns
According to the advisory issued by the SEC, eToro, a multinational trading platform with approximately 140 million users, has not obtained the necessary license to conduct authorized transactions in the Philippines. The SEC argues that eToro is not registered with the agency and there is no evidence of its incorporation in the country. Additionally, the company has failed to obtain the required licenses under the Securities Regulation Code. As a result, eToro is not permitted to act as a platform, offer products, act as an agent, or facilitate stock exchange activities within the Philippines.
Therefore, individuals considering engaging with uncertified online platforms like eToro must carefully consider the potential risks. Offenders may face legal sanctions instead of viewing eToro as a violation of freedom of expression. Those found in violation of securities laws risk penalties of up to PHP 5 million ($88,357) and a maximum prison sentence of 21 years.
eToro’s response and continued presence
While eToro claims to support the Philippines on its official website, there has been no response from the company in regards to the SEC’s advisory. The SEC’s recent actions are part of a broader effort by the government to regulate the cryptocurrency and online trading industries. This move follows a similar advisory issued by the SEC in the United States in November 2023, which restricts Binance from offering securities services in the US.
As a result, the National Telecommunications Commission (NTCA) has decided to increase its efforts to block online sites involved in cryptocurrency transactions without a valid permit. The SEC has ordered eToro to cease resolving Binance’s website, citing concerns about the security of investors’ funds. Without sufficient evidence that it can handle transactions involving the Filipino currency, Binance’s operations in the country may be jeopardized.
In contrast to the SEC’s advisory, reformers within the Philippine online financial market have been urging caution for investors using platforms like eToro. Adhering to existing laws and regulations will be crucial as the crypto and online trading industries face more stringent scrutiny. eToro’s failure to establish itself in the national business scene raises concerns for potential future investors. It is essential for individuals to stay informed and make decisions based on an understanding of the current reality in order to protect their investments.
