The Australian Securities and Investments Commission (ASIC) has filed a lawsuit against the crypto exchange eToro for offering high-risk contracts for difference (CFD) products, reportedly causing almost 20,000 clients to lose huge sums trading CFDs between October 5, 2021, and June 14, 2023.
ASIC’s Case Against eToro
In its official statement released on August 3, ASIC alleges that eToro breached the design and distribution obligations of its CFD product and that the crypto exchange was dishonest in its dealings.
The Commission’s regulation requires that the target markets for CFDs must be narrow and clearly defined, as retail clients risk losing huge sums. Furthermore, it stipulates that CFD issuers like eToro must follow the design and distribution rules for CFD products and cannot adjust their target markets to fit their existing clients.
Part of the statement read:
ASIC considers that eToro’s conduct is likely to have…
