When it comes to investing and trading, the safety of your funds and personal data should be a top priority. As a leading online trading platform, eToro has implemented multiple measures to protect its users. In this comprehensive guide, we’ll cover the ins and outs of eToro’s safety features, regulations, and more.
| Key Takeaways |
|---|
| eToro is regulated by multiple financial authorities, including FCA, ASIC, and CySEC. |
| The platform offers varying levels of compensation and protection based on a user’s geographic location. |
| eToro has a strong track record and solid reputation in the industry. |
| Client funds are kept in segregated bank accounts, and data is encrypted and protected by multiple security measures. |
A Closer Look at eToro’s Regulations
Table of content
- A Closer Look at eToro’s Regulations
- 🌍 The Global Regulatory Landscape
- 🇬🇧 FCA Regulation and UK Protection
- 🇪🇺 CySEC Regulation and European Protection
- 🇦🇺 ASIC Regulation and Australian Protection
- ⚖️ Negative Balance Protection
- eToro’s Reputation and Track Record
- 📈 A Strong History in the Industry
- 🌐 Venture Capital Backing
- 🔍 Top-Tier Regulatory Oversight
- Ensuring the Safety of Your Funds and Data
- 💰 Segregated Bank Accounts
- 🔐 Data Protection and Security Measures
- 👤 Client Identity Verification
- 🔑 Login Verification and Two-Factor Authentication
- fpr
- Conclusion
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🌍 The Global Regulatory Landscape
As a Cypriot Investment Firm with registration number HE20058, eToro operates under the supervision of various financial authorities. These include the UK’s Financial Conduct Authority (FCA), Australia’s Australian Securities and Investments Commission (ASIC), and Cyprus’s Cyprus Securities and Exchange Commission (CySEC).
The protection mechanisms for each client depend on their geographical location. Since eToro operates three legal entities and serves customers based on their residency, the entity you belong to defines the Terms and Conditions you agree too upon registering on the platform. This ensures there are multiple official measures implemented aimed at protecting customers. For more details, also check eToro’s description of its regulation and license.
🇬🇧 FCA Regulation and UK Protection
UK-based traders can open an account with eToro (UK) Limited, which is regulated by the FCA. In the event that eToro becomes insolvent, UK clients are covered up to £85,000 by the Financial Services Compensation Scheme (FSCS).
🇪🇺 CySEC Regulation and European Protection
Traders from other European countries can register with eToro (Europe) Limited, which is regulated by CySEC under license 109/10. Investment protection coverage for eToro Europe clients is capped at €20,000, as determined by the Cypriot Investors Compensation Fund. Both the UK and European platforms comply with the Markets in Financial Instruments Directive (MiFID), an EU law that provides a regulatory framework for investment services.
🇦🇺 ASIC Regulation and Australian Protection
Clients from Australia are covered by ASIC, the Australian financial regulatory authority. However, ASIC does not provide a specific monetary amount for obligatory investor protection. In the United States, eToro is registered with FinCEN as a Money Services Business.
⚖️ Negative Balance Protection
eToro offers negative balance protection for forex spot and CFD trading, but only for retail clients from the European Union. Professional and non-EU clients are not covered for negative balance protection.
eToro’s Reputation and Track Record
📈 A Strong History in the Industry
Established in 2007 in Israel, eToro has become a prominent player in the online trading sector. With customers from over 140 countries, the platform caters to traders of various skill levels and backgrounds. A long track record and large user base indicate that eToro has been thoroughly tested and has the resources to invest in security measures.
🌐 Venture Capital Backing
As a privately-owned fintech startup, eToro has received venture capital support from a diverse range of investors. These include Commerz Ventures GmbH (the VC arm of Commerzbank), several Israeli firms, and other investors from around the globe. Yoni Assia, the founder of eToro, currently serves as the company’s CEO.
🔍 Top-Tier Regulatory Oversight
eToro’s commitment to transparency and regulatory compliance is evident in its registration with top-tier financial authorities. The company values its reputation and strives to prevent regulatory noncompliance and other forms of malfunction.
Ensuring the Safety of Your Funds and Data
💰 Segregated Bank Accounts
eToro keeps customer funds in segregated bank accounts in compliance with applicable laws and regulations. For more information, refer to and eToro’s .
🔐 Data Protection and Security Measures
eToro invests heavily in customer security and data protection. The platform employs firewalls, SSL data encryption, and other safety tools to protect sensitive information. Data is transmitted using encryption, and eToro continuously updates its security protocols and mechanisms.
👤 Client Identity Verification
To prevent fraud and ensure platform safety, eToro requires new users to complete an identity verification process. This involves submitting specific verification documents and confirming personal details.
🔑 Login Verification and Two-Factor Authentication
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eToro implements a two-factor authentication (2FA) process for account access. Upon login, users receive a verification code via SMS, which they must enter to access their accounts. The platform allows active sessions on only one device at a time, limits login attempts, and employs measures to thwart automated attacks. Users can adjust these security settings in their eToro Account Settings.
Conclusion
This in-depth guide should alleviate any concerns regarding safety and regulation on eToro. If you still have questions, feel free to ask them in the comments section below. Remember, trading involves capital loss risks and should be approached responsibly. Good luck trading!
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GENERAL RISK WARNING
- ▸eToro is a multi-asset platform that offers: Stocks, Crypto assets, and CFDs.
- ▸CFDs are complicated and can make you lose money quickly because of leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. Think about if you understand how CFDs work and if you can afford to take the risk of losing your money.
- ▸Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
- ▸Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
- ▸Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
- ▸eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity-specific information about eToro.
Be warned!
Author & Expert Trader - Financial Analyst :
