eToro rolls out crypto trading in New York three years after receiving BitLicense

Trading platform eToro has finally rolled out crypto assets for its New York clients, more than three years after it was granted a BitLicense.

The firm will begin by listing about 20 tokens in the state’s regulatory perimeter, with the expectation of adding more over time, Head of eToro U.S. Andrew McCormick told The Block in an interview.

In most of the 74 other countries and 47 other U.S. states where eToro operates, the firm offers about 115 crypto assets, in addition to its other asset classes, including stocks, ETFs, indices, currencies, and commodities.

It also plans to add staking in New York. “We talked to the regulators about this,” McCormick said. “A new business plan requires new product updates to the agreement, so that’s all in the pipeline.”

eToro was granted a Virtual Currency Business Activity License (aka BitLicense) in February 2023, according to the New York State Department of Financial Services website. The notorious license is needed to legally engage in business activities involving crypto in the state.

Since its introduction in 2015, fewer than 40 firms have been approved for a BitLicense, and not all of them end up actually rolling out crypto services in the state. Many firms, like eToro, end up creating separate legal entities to operate in New York, while some, like Kraken, eschew the state entirely.

Asked if he thought it would take three years to begin crypto operations in New York after receiving the license, McCormick said: “Certainly not.”

“We knew it wouldn’t be ‘day one, flip a switch.’ We were looking at maybe that year to launch,” he said. “So we wish it were earlier, but we’re so thankful it’s happened already. And we see it as an honor because not everybody has gotten that license and has activated that license.”

Notably, McCormick said eToro was the first firm following the collapse of FTX to be granted a BitLicense.

“We were in the process, near the finish line, when that happened, and as it should, it certainly increased the scrutiny and diligence,” McCormick said. “So we were certainly proud to get through those tough standards based on our long history, focus on compliance and AML, and customer protection.”

Better than nothing

To be sure, McCormick also said the firm was in no rush to launch in New York during the Biden administration, which did not offer a “friendly time to invest and grow in the world of crypto in the United States, even if we have the proper licenses.”

He added that the firm was also primarily focused on its initial public offering last year.

“We have a very positive engagement with the New York Department of Financial Services,” McCormick said. “They are very thorough and detailed, but they want to succeed, they want their member and supervised firms to succeed, and ultimately they want investors to succeed.”

New York is not the only U.S. state with increased scrutiny of crypto businesses. McCormick noted the firm doesn’t offer crypto in Hawaii and Nevada.

That’s part of the reason why McCormick is looking forward to something like the U.S. House’s Clarity Act potentially passing, which would introduce broad crypto market structure guidelines at the federal level, while assigning the Securities and Exchange Commission and Commodity Futures Trading Commission specific oversight roles.

The Clarity Act and related drafts offered by Senate committees have been hamstrung on the Hill as lawmakers and lobbyists argue over the details.

“I’m of the view that I would rather have B-plus legislation rather than none,” McCormick said. “The current framework is 50 different states with different standards. Securities laws from 1933 and 1934, guidance that’s subject to political change, and a Supreme Court case from 1946 about orange trees.”