About eToro

eToro is a global brokerage that aims to make trading accessible to everyone. They put a unique “social media spin” on investing by allowing investors to follow and easily replicate the portfolios of other successful traders on the eToro platform. Similar to how you might follow your favorite artists or inspirational individuals on Instagram, you can follow top traders on eToro, and if you are so inclined, you can even set your account to copy their trades.

Although eToro’s platform supports trading in stocks, currencies (including about a dozen crypto currencies) and CFDs (contract for difference) for the residents of more than 140 countries, they only recently expanded into the U.S. Consequently, right now Americans can only trade crypto currencies on the eToro platform, however the broker has hinted that it may expand the offerings on its U.S. platform with time.


Is eToro a Safe and Legitimate Firm?

Although you may not have heard of eToro before, they are a legitimate broker and trading platform with headquarters in the UK, Israel, and Cyprus. As such, they are regulated in Europe by the Cyprus Securities and Exchange Commission and in the UK by the Financial Conduct Authority (FCA). Regulation under these two agencies is required and important as the eToro platform supports trading in stocks outside of the U.S. eToro is not (and doesn’t need to) register with the U.S. Securities and Exchange Commission (SEC) because they don’t currently offer stock trading.

Because eToro offers crypto currency trading in the U.S., they are registered with the U.S. Commodity Futures Trading Commission (CFTC). The CFTC is the regulatory agency tasked with ensuring the integrity of all futures markets in the U.S., including currency exchanges.


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Is eToro a Scam?

eToro is definitely not a scam. They have been around globally for more than a decade and have millions of customers from more than a hundred different countries. They are registered with multiple regulatory authorities in Europe, Australia, and the U.S., among other countries. Even though they just recently expanded into the U.S., and are therefore less well-known here, eToro is an established and respected firm with a global footprint.


Is eToro FDIC/SIPC Insured?

The Securities Investor Protection Corporation (SIPC) protects U.S. investors against the loss of cash and securities (such as stocks and bonds) in SIPC-member brokerage firms. The SIPC coverage does not include positions in commodities, currencies, and futures contracts, and as such, eToro is not SIPC insured. We would be expect that if, in the future, eToro offers stock trading in the U.S. they would then seek SIPC insurance to protect investors.

Similar to SIPC coverage, the Federal Deposit Insurance Corporation (FDIC) protects U.S. depositors’ cash balances in FDIC-insured banks and financial institutions. eToro is not a bank and is therefore not FDIC insured.


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Foreign Regulation and Licensing

In case you are on overseas investor (or if you are just curious) eToro is registered with the required regulatory agencies in the different countries where it offers trading in more than just crypto currencies. eToro’s brokerage services are provided by eToro (Europe) Ltd., which is a registered investment firm in Cyprus (registration # HE20058). They are regulated by the Cyprus Securities & Exchange Commission.

In the UK, eToro (UK) is authorized and regulated by the Financial Conduct Authority (FCA), which regulates the trading of financial securities in the UK as the SEC does in the U.S. eToro’s FCA firm reference number is 583263.

In Australia, eToro operates under Australian Financial Services License (AFSL) 491139, which is issued by the Australian Securities and Investments Commission (ASIC) and regulated under the Corporations Act (Commonwealth).


eToro Better Business Bureau Rating

The Better Business Bureau (BBB) is a non-profit corporation that collects and compiles data about businesses in the U.S., Canada and Mexico, including reviews and consumer complaints, in order to assign a quality rating or ranking that potential customers can reference. We searched the BBB for eToro but didn’t find any reviews or information. This is not surprising, however, for a company that has just recently expanded operations into the U.S. We would expect reviews and eventually a BBB profile and rating to come with time as more U.S. consumers signup for eToro’s crypto platform.


eToro’s Founders and CEOs

Israeli brothers Yoni Assia and Ronen Assia along with David Ring founded eToro in 2006 in Tel Aviv, although at the time the company was known as RetailFX. Yoni, who still serves as CEO of eToro, is a successful entrepreneur who previously founded CDRide - a tech startup that took pictures of rollercoaster riders and wirelessly transmitted the images to a booth for printing and purchase. Since its 2006 founding, eToro has raised well over $100million from many international investors, and as of 2017, eToro had 8 million accounts.


eToro Review

For more information about the company's online trading accounts take a look at eToro Crypto Currency Review.


Is eToro Safe Conclusion

eToro is a legitimate and respected global trading platform that has been around long enough and successful enough to be trusted. Although many U.S. investors may be suspicious of eToro simply because it’s not well known in the States, there is no reason to believe the company is a scam. eToro’s unique selling point is its social media feature where you can follow and replicate the portfolios of the broker’s top-performing accounts, and this is something few other brokers can offer. The biggest downside right now is for U.S. investors since currently eToro accounts for Americans only support trading in crypto currencies, but we are hopeful this will change with more time.


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eToro Safety reviewed by TopRatedFirms.com Rating: 4