Social investing platform eToro today announced that the Financial Industry Regulatory Authority, Inc. (FINRA) has approved its membership application. Receiving the license from the Wall Street independent regulator will legally enable the SEC-registered firm to buy and sell regulated securities on behalf of others.
Being a FINRA member broker-dealer also allows eToro to extend its commission-free stocks offering to clients in the US, nearly 13 months after it introduced the service in Europe and the UK markets, with the product now available in over 100 countries.
The expansion plan, however, doesn’t come without risk as eToro is entering a competitive marketplace with an offering that is a similar concept to investing app Robinhood, which also has zero brokerage fees and has reached 13 million users in the US.
“Since eToro is now a FINRA member broker-dealer, registered with the SEC, we look forward to providing our US customers with a commission-free, multi-asset, social Trading Platform . As a global fintech leader, we view the US market as strategic. Globally eToro has more than 13M registered users, and during the first half of 2020, our trading volume exceeded $600B. We will continue to increase our focus on the US market, and we look forward to launching the full product next year,” said Guy Hirsch, US Managing Director for eToro.
eToro has already secured a soft launch for its crypto services in the US in 2019, but despite its vast experience in the trading space, it was aware of the regulatory headwinds that come with expanding into mainstream assets classes.
At launch, the US platform was only supporting trading for crypto assets, but eToro planned to add additional asset classes within the next 12 months. In eToro’s existing markets, the company’s 13 million-plus users are able to trade and hold more than 1,500 different asset classes and markets, including stocks, bonds, Cryptocurrencies , forex, commodities and more.
On the crypto front as well, it is worth pointing out that eToro is now competing with major players that have established a presence in the country, such as Coinbase.
