Chair

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<p>The Australian Securities and Investments Commission's (ASIC) recently <a href="https://asic.gov.au/about-asic/news-centre/find-a-media-release/2023-releases/23-204mr-asic-sues-etoro-in-its-first-design-and-distribution-action-to-protect-consumers-from-high-risk-cfd-products/" rel="noopener noreferrer nofollow">filed</a>&nbsp;lawsuit against <a href="https://u.today/cardano-ada-listed-on-etoro-as-exchange-plans-a-us-rollout" rel="noopener noreferrer nofollow">social brokerage firm eToro</a> is yet another push by the regulator to safeguard the interests of its retail investors. According to the market regulator, charges were filed with respect to its Contract for Difference (CFD) products.</p> 
<h2 id="asic-complaints-against-etoro">ASIC Complaints against eToro</h2> 
<p>According to the ASIC, the trading company broke design and distribution obligations as well as its license obligations to act honestly, fairly and efficiently. The regulator claimed that it is investigating eToro to see if it properly screened its target market to consider them fit for its CFD products.</p> 
<p>ASIC is concerned that eToro might have maintained a far broader net of customers for such high-risk and volatile trading products. Concerned that the CFD is a market where most traders lose their funds, ASIC said it is unsure whether or not eToro conducted the right tests to properly categorize the users it permitted to trade the product.</p> 
<p>To buttress its point, ASIC noted that as many as 20,000 of eToro's customers lost their funds between Oct. 5, 2021, and June 14, 2023.</p> 
<blockquote> 
 <p>CFD issuers must comply with the design and distribution regime and cannot simply reverse engineer their target markets to fit existing client bases’, said ASIC Deputy Chair Sarah Court, adding that the Commission ‘is disappointed by the alleged lack of compliance in this case, given eToro’s market penetration and the depth of its brand awareness, both in Australia and globally.</p> 
</blockquote> 
<p>Per the suit, ASIC is '"seeking declarations and pecuniary penalties from the court."</p> 
<h2 id="global-tightening-for-exchanges">Global tightening for exchanges</h2> 
<p>With eToro being the latest trading entity charged by a federal regulator, it shows that the crackdown on exchanges is more or less a global affair.</p> 
<p>The U.S. SEC has <a href="https://u.today/cardano-ada-alleged-as-security-again-as-sec-now-sues-coinbase" rel="noopener noreferrer nofollow">filed</a> charges against the duo of Binance and Coinbase exchanges, extending its stance from earlier in the year when it <a href="https://u.today/kraken-trading-volume-up-20-despite-sec-crackdown-heres-whats-happening" rel="noopener noreferrer nofollow">sued and settled</a> with Kraken exchange.</p>

eToro Under Legal Siege in Australia, Here's Reason

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