Jump to content

eToro

From Wikipedia, the free encyclopedia

eToro
Company typePrivate
IndustryFinancial services
Investing online
Social investment
Founded2007; 17 years ago (2007)
FounderYoni Assia, Ronen Assia, David Ring
HeadquartersTel Aviv, Israel
Area served
Worldwide
Key people
Yoni Assia, CEO
ProductsElectronic trading platform, stocks, copy trading, social trading
ServicesInvestment management
RevenueIncreaseUS$1.2 billion (2021)[1]
DecreaseUS$240.6 million (2021)[2]
DecreaseUS$265.7 million (2021)[2]
Number of employees
1700[3]
Websitewww.etoro.com

eToro is a social trading and multi-asset investment company that focuses on providing financial services.[4] Its headquarters are located in Central Israel.[5][6][7][8]

History

[edit]

eToro was founded as RetailFX in 2007[9] in Tel Aviv, by brothers Yoni Assia and Ronen Assia together with David Ring.[10] In 2010, the firm released the eToro OpenBook social investment platform, along with its CopyTrader feature, that enables investors to copy the network's top traders automatically.[11] Later that year, the firm released an Android app.[12]

Between 2007 and 2013, the company raised $31.5 million in four rounds of funding.[13][14] In December 2014, it raised $27 million from Russian and Chinese investors.[15] In December 2017, it joined CoinDash to develop Blockchain-based social trading.[16] In 2018, it raised a further $100 million in a private funding round.[17] Overall, more than $162 million has been invested in the company by investment firms.[18]

In 2013, the firm introduced the capability to invest in stocks and CFDs, alongside commodities and currencies, with an initial offering of 110 stock products (which later grew to 3000 financial products).[19][20] The same year, it was authorized to offer services in the UK, under the subsidiary eToro UK.[21][22] In January 2014, the firm added cryptocurrencies to its investment instruments.[23][24][25][26]

In March 2019, eToro acquired Danish blockchain company Firmo for an undisclosed sum.[27][28] In October 2019, eToro released a sentiment-based crypto portfolio using AI technology to evaluate Twitter's current positive or negative impressions of digital assets.[29] In November 2019, the firm acquired Delta, a crypto portfolio tracker application company, based in Belgium.[30][31] In March 2019, the company launched its cryptocurrency trading platform and its standalone cryptocurrency wallet to US users.[32][33][34]

In 2021, the company reported operating in 140 countries[35][36] and having 20 million users.[37] In March 2021, it announced that it is planning to become a publicly traded company through a reverse subsidiary merger with FinTech Acquisition Corp V (NASDAQ:FTCV), a Special Purpose Acquisition Company (SPAC) backed by former Bancorp CEO Betsy Z. Cohen.[38] The combined company will operate as eToro Group Ltd and have an implied estimated enterprise value of $10.4 billion at closing with $650 million in funding coming from private investment in public equity (PIPE) from Softbank Vision Fund 2, Third Point, Fidelity Management, Wellington Management, ION Investment Group and Research Co.[39][40]

In 2020, the company acquired Marq Millions, the UK division of e-money, which was then renamed to eToro Money.[41][42] The company also obtained a primary membership of Visa and an electronic money institution (EMI) license from the Financial Conduct Authority.[43] In December 2021, the company launched the eToro Money debit card for UK residents.[44]

In February 2022, eToro released its first Super Bowl ad during Super Bowl LVI, also nicknamed as "Crypto Bowl”.[45][46] Called “Flying your way”, the 30-seconds commercial featured a consumer seeking cryptocurrency advice and crypto enthusiasts falling from the sky to offer him guidance and assistance, asking “to the moon?” The advertisement also featured a Shiba Inu dog addressing meme coin Shiba Inu (SHIB)[47] and Bored Ape.[48][49]

In August 2022, eToro signed a definitive agreement to acquire Gatsby, a fintech startup specializing in options and stock trading, for $50 million in cash and common equity.[50] In September 2022, the Reserve Bank of India (RBI), India's central bank, released a list of 34 forex trading online platforms, in which eToro was also listed as an illegal platform in India.[51]

Operations

[edit]

eToro's main research and development office is located in Tel Aviv, Israel. The firm is regulated by the CySEC authority in the EU;[7] it is authorized by the FCA in the UK,[21][22] and by FinCEN in the United States,[5] and by the ASIC in Australia.[52] In 2013, it was fined €50.000 by CySEC due to detected weaknesses which concerned its organisation and operation structure back to 2010.[53] In 2015, eToro was added to Quebec blacklist as an unauthorized foreign company that encouraged residents to invest in binary options via its trading platform.[54] The company operates in 140 countries.[55]

Controversies

[edit]

2022 closure of stock positions in Magnit PJSC

[edit]

On March 2, 2022, eToro triggered a stop-loss closure of investor positions in Magnit stock (MGNTL.L) at $0.01 per share.[56][57][58] On March 7 2022, eToro reimbursed clients for the total initial invested amounts of MGNTL.L.[59]

2021 closure of leveraged positions

[edit]

On January 8, 2021, eToro notified its European clients that "due to extreme market volatility in the crypto markets, margin positions for all leveraged crypto positions" should be changed to nonleveraged, or they would be closed within four hours.[60][61]

ASIC 2023 lawsuit

[edit]

In August 2023, the Australian Securities and Investments Commission filed a case against eToro Aus Capital Limited in Federal Court, alleging that the company of lack of compliance, more specifically, of violation of design and distribution obligations. The screening test for onboarding clients was so lax that nearly anyone could qualify. ASIC argued that eToro's target market for CFDs was overly broad for such a high-risk product. Between 5 October 5 2021 and 14 June 14 2023, almost 20,000 eToro clients reportedly lost money.[62]

As of November 2024, court proceedings have been postponed eight times.[62]

The Times of Israel investigation

[edit]

In July 2021, The Times of Israel published an investigation on eToro, exposing dozens of cases of staffing connections between eToro and Israel's largely fraudulent binary options industry.[63] For example, Shmuel Hauser, former chairman of the Israel Securities Authority (ISA), joined eToro as an advisory board member after overseeing regulatory decisions that impacted the company. During Hauser's ISA tenure from 2011 to 2017, he agreed to modify a Knesset bill that would have restricted eToro's operations, which allowed eToro to continue expanding internationally. Although eToro did not engage in binary options, a sector under heavy scrutiny for fraudulent practices, the modified bill exempted companies like eToro from stricter regulations. In the same year, he resigned from his post at ISA amidst several high-profile anti-corruption scandals. After leaving the ISA, Hauser began advising eToro on regulatory issues worldwide. In 2021, Hauser became an advisory board member at eToro.[63] At the same year, eToro announced that it had appointed he, former supervisor of banks at the Bank of Israel, in 2021 was appointed deputy CEO and global COO.[63]

The Times of Israel also covered the story of Nir Barkat, Likud MK and former mayor of Jerusalem. Barkat was linked to eToro in the "Pandora Papers," revealing he holds shares in the company, which is registered in the Virgin Islands despite most operations being based in Israel. While mayor, Barkat claimed his assets were under a blind trust, but leaks indicate they remained in his name until he transferred them to his brother upon joining the Knesset in 2019, contrary to Knesset Ethics Committee guidelines. In 2019, Barkat's net worth was valued at $139 million.[63][64]

References

[edit]
  1. ^ "eToro doubles revenue in 2021, but posts $84Mmln Q4 loss". FinanceFeeds. 8 March 2022.
  2. ^ a b "Investor Update". eToro.
  3. ^ "eToro SPAC merger delayed again. Is the trading platform still worth $10 billion?". Calcalist. 12 December 2021.
  4. ^ "Israeli social trading firm eToro raises $100 million in private funding". Reuters. 23 March 2018. Retrieved 2 November 2019.
  5. ^ a b Russo, Camila (15 May 2018). "U.S. Crypto Trading Platforms Are About to Get More Competition". Bloomberg. Retrieved 5 December 2019.
  6. ^ Williams-Grut, Oscar. "A trading company with 10 million customers is setting up a crypto desk for hedge funds and banks". Business Insider. Retrieved 2 November 2019.
  7. ^ a b "Etoro (Europe) Limited - CySEC". CySEC. Retrieved 13 May 2015.
  8. ^ "ETORO USA LLC - NFA". NFA. Retrieved 13 May 2015.
  9. ^ Levy, Dotan (28 October 2019). "Social Trading Company eToro Expands Offices". CTECH. Retrieved 2 November 2019.
  10. ^ Rust, Donnie (7 November 2013). "eToro. Seriously? Is It That Easy?". Littlegate Publishing. Archived from the original on 23 March 2014. Retrieved 10 May 2016.
  11. ^ Greenberg, Michael (12 July 2010). "eToro launches its own Forex Social Community – OpenBook". Finance Magnates. Retrieved 13 May 2015.
  12. ^ Greenberg, Michael (7 October 2010). "eToro's OpenBook goes mobile". Retrieved 13 May 2015.
  13. ^ Arrington, Michael (8 June 2010). "eToro Adds $2.4 Million to the Coffers: "Zynga For Real Men"". TechCrunch. Retrieved 13 May 2015.
  14. ^ Lunden, Ingrid (13 March 2012). "Social Investment Network eToro Is Picking Up Another $15 Million From Spark, Others". TechCrunch. Retrieved 13 May 2015.
  15. ^ Williams-Grut, Oscar (12 December 2014). "Silicon Round-Up: eToro plans UK push after snagging $27m from Russians and Chinese". London Evening Standard. Retrieved 13 May 2015.
  16. ^ "eToro Partners CoinDash to Develop Blockchain-Based Social Trading | Finance Magnates". Finance Magnates | Financial and business news. 14 December 2017. Retrieved 14 May 2018.
  17. ^ "eToro raises $100 million from investors". TheCashDiaries. 27 March 2018. Archived from the original on 27 March 2018. Retrieved 27 March 2018.
  18. ^ Orbach, Meir (8 December 2020). "eToro joins Israeli unicorn club by tripling valuation in two years to reach $2.5 billion". CTECH - www.calcalistech.com. Retrieved 10 September 2021.
  19. ^ Finberg, Ron (25 July 2013). "eToro Adds Stocks on its Social Trading Network as Operations Evolve". Finance Magnates. Retrieved 13 May 2015.
  20. ^ "A Beginner's Guide to Trading with eToro". AlphaNewsCall. 27 April 2022. Retrieved 17 May 2022.
  21. ^ a b "583263 - eToro (UK) Ltd - FCA". FCA. Archived from the original on 16 April 2014. Retrieved 13 May 2015.
  22. ^ a b Reddan, Fiona. "Looking to boost your income? eToro is looking for Irish freelance fund managers". The Irish Times. Retrieved 2 November 2019.
  23. ^ "Breaking: eToro Enters the US Market by Offering Cryptocurrency Trading". Finance Magnates. 16 May 2018. Retrieved 13 April 2019.
  24. ^ Doshi, Vidhi (13 January 2014). "eToro launches Bitcoin trade". TechCityNews.com. Archived from the original on 29 June 2017. Retrieved 13 May 2015.
  25. ^ "German and British Stocks Now Available for Investment". ForexBrokernews.com. 14 April 2014. Archived from the original on 18 May 2015. Retrieved 13 May 2015.
  26. ^ "eToro rolls out its cryptocurrency wallet for Android and iOS". The Next Web. 8 November 2018. Retrieved 2 November 2019.
  27. ^ Manuel Baigorri, Alastair Marsh (25 March 2019). "Trading Platform EToro to Buy Danish Blockchain Company Firmo". Bloomberg. Retrieved 2 November 2019.
  28. ^ "Social investment platform eToro acquires smart contract startup Firmo". TechCrunch. 25 March 2019. Archived from the original on 17 March 2020. Retrieved 2 November 2019.
  29. ^ Ballentine, Claire (15 October 2019). "Crypto Portfolio Will Analyze Twitter to Gauge Trader Sentiment". www.bloomberg.com. Retrieved 5 December 2019.
  30. ^ "Investment platform eToro acquires crypto portfolio tracker app Delta". TechCrunch. 6 November 2019. Retrieved 5 December 2019.
  31. ^ "Currency Revolution Series: What Does M&A Deal of eToro and Delta Mean For?". EconoTimes. 8 November 2019. Retrieved 5 December 2019.
  32. ^ "EToro bringing crypto trading and wallet to the US". TechCrunch. 7 March 2019. Retrieved 5 December 2019.
  33. ^ Digalaki, Eleni. "eToro has launched in the US". Business Insider. Archived from the original on 13 June 2021. Retrieved 5 December 2019.
  34. ^ "A 32-Year-Old Trader Is Driving 21,000 Amateur Stock Investors". Bloomberg.com. 2 October 2020. Retrieved 19 October 2020.
  35. ^ "Sogar Aktienhandel zum Nulltarif". www.platow.de (in German). 9 August 2019. Retrieved 2 November 2019.
  36. ^ "Facebook announces launch of Libra cryptocurrency to take on bitcoin". Express.co.uk. 18 June 2019. Retrieved 2 November 2019.
  37. ^ Chatenay, Victor. "Trading app eToro goes public via $10.4 billion SPAC deal". Business Insider. Archived from the original on 21 July 2021. Retrieved 1 June 2021.
  38. ^ La Monica, Paul (16 March 2021). "Online trading firm eToro going public in more than $10 billion SPAC deal". CNN. Retrieved 18 March 2021.
  39. ^ "Trading platform eToro to go public via SPAC merger in $10B deal". TechCrunch. 16 March 2021. Retrieved 4 August 2021.
  40. ^ Hussain, Noor Zainab (16 March 2021). "Israel's eToro to go public through $10.4 billion SPAC deal backed by SoftBank, others". Reuters. Retrieved 4 August 2021.
  41. ^ "eToro Acquires Marq Millions to Support Debit Card Launch". financemagnates.com. 30 July 2020. Retrieved 11 January 2021.
  42. ^ "With Robinhood's UK launch delayed, eToro to bring out UK debit card following acquisition". TechCrunch. 29 July 2020. Retrieved 7 April 2022.
  43. ^ "eToro plans debit card launch ahead of rival's entry to UK". siliconrepublic.com. 29 July 2020. Retrieved 11 January 2021.
  44. ^ "eToro is launching its first debit card in the UK". businessinsider.com. Archived from the original on 4 October 2022. Retrieved 11 January 2021.
  45. ^ Locke, Taylor (14 February 2022). "'To the moon': You probably saw the crypto Super Bowl ads—here's what to know before buying in on the hype". CNBC. Retrieved 29 April 2022.
  46. ^ Roach, Sarah (14 February 2022). "Coinbase's Super Bowl ad hooked 20 million people in one minute". Protocol. Retrieved 29 April 2022.
  47. ^ Agarwal, Reshab (14 February 2022). "eToro Super Bowl ad doesn't compare well with FTX or Coinbase". TechStory. Retrieved 29 April 2022.
  48. ^ Beer, Jeff (14 February 2022). "How crypto brands failed to hijack the Super Bowl". Fast Company. Retrieved 29 April 2022.
  49. ^ "Did you see it: A Bored Ape Made Its Way Into eToro's Super Bowl Ad". www.theboredapegazette.com. 14 February 2022. Retrieved 29 April 2022.
  50. ^ Azevedo, Mary Ann (17 August 2022). "eToro gets the great Gatsby on its horns for $50M". TechCrunch. Retrieved 16 October 2022.
  51. ^ "RBI issues alert list: Declares these 34 forex trading online platforms as illegal". The Times of India. 11 September 2022.
  52. ^ "Gen Y investors bank on disruption". The Australian. Retrieved 2 November 2019.
  53. ^ "CySEC Reaches Settlement With eToro at €50,000 for Undisclosed Violations". financemagnates.com. 2 February 2012. Retrieved 13 May 2015.
  54. ^ "FXTM and eToro Added to Québec Blacklist by Local Watchdog". financemagnates.com. 23 June 2013. Retrieved 13 May 2015.
  55. ^ Burroughs, Callum. "Robinhood rival eToro says it added 5 million users in 2020 as millennials piled into unicorn stock-trading apps". Business Insider. Retrieved 29 July 2022.
  56. ^ Hussain, Ali (18 September 2021). "My Ryanair shares were flying high — then someone sold them". The Times. Retrieved 8 March 2022.
  57. ^ Wells, Charlie (5 March 2022). "Russian Stock Dumped for 1 Cent Shocks Retail Investors on EToro". Bloomberg. Retrieved 8 March 2022.
  58. ^ Paz, Javier (4 March 2022). "EToro Clients Up In Arms Over Forced Exit From Russian Investments". Forbes. Retrieved 8 March 2022.
  59. ^ Gyftopoulou, Loukia (7 March 2022). "Robinhood Rival EToro Reimburses Users After Dumping Russia's Magnit". Bloomberg. Retrieved 8 March 2022.
  60. ^ Hirtenstein, Anna (11 January 2021). "Online Platform eToro Called in Leveraged Crypto Trades When Bitcoin Price Peaked". Wall Street Journal. ISSN 0099-9660. Retrieved 14 January 2021.
  61. ^ "Trading App Offers $500 to Lure Investors to Open $5,000 Crypto Accounts". Bloomberg.com. 12 January 2021. Retrieved 14 January 2021.
  62. ^ a b "ASIC sues eToro in its first design and distribution action to protect consumers from high-risk CFD products". ASIC. 3 August 2023. Retrieved 8 November 2024.
  63. ^ a b c d Weinglass, Simona; Solomon, Shoshanna (1 July 2021). "Ex-securities regulator now works for fintech firm that pushed him to weaken law". The Times of Israel. Retrieved 8 November 2024.
  64. ^ "Former justice minister, billionaire among Israelis named in 'Pandora Papers'". The Times of Israel. 4 October 2021. Retrieved 8 November 2024.
Retrieved from "https://en.wikipedia.org/w/index.php?title=EToro&oldid=1256239961"