WIKIFX REPORT: Is eToro Safe? Licensing & Security Reviewed

eToro is a popular stock brokerage, CFD trading platform, and cryptocurrency exchange with more than 25 million users around the world. While that user base speaks for itself, it makes sense to take a closer look at eToros safety and security before trusting this platform.

In this guide, well take a closer look at eToro and answer the question: is eToro safe to trade with？

Is eToro Safe？ Our Verdict

eToro is a globally recognized stock and ETF broker, CFD trading platform, and one of the best crypto exchanges out there. The platform was founded in Tel Aviv, Israel in 2007 and has more than 25 million users around the globe. Its available for trading in hundreds of countries, including the US, Canada, the UK, much of Europe, South America, and the Middle East.

eToro is regulated by multiple top-tier financial watchdogs including the UKs Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), and the Australian Securities and Investments Commission (ASIC). eToro USA is registered with the Financial Crimes Enforcement Network (FinCEN) as a money services business and is a member of the Financial Industry Regulatory Authority (FINRA).

In total, eToro has more than $9.4 billion in assets under management. Cash deposits in the US are insured by the FDIC and investments are insured by the SIPC. The company has never reported a significant security breach or loss of client funds.

Given all of this, eToro is worthy of your trust. This trading platform is subject to the same regulatory oversight as many of its US-based peers and it has proven its ability to handle billions of dollars in customer funds safely.

eToro Regulation & Licenses

eToro and its subsidiary companies are licensed to operate in jurisdictions around the world.

USA

eToro USA is registered as a money services business with FinCEN, which acts to prevent money laundering through brokerage firms. eToro is a member of FINRA and the SIPC, and cash deposits with eToro USA are insured by the FDIC. FINRA oversees broker-dealers in the US to ensure that they follow ethical trading practices and comply with all securities trading regulations.

UK

eToro UK is authorized and regulated by the Financial Conduct Authority (FCA) under firm reference number 583263. The FCA is the UKs primary financial watchdog and enforces all UK securities and crypto trading regulations.

Cyprus

eToro Europe is registered in Cyprus as a Cypriot Investment Firm under registration number HE200585. eToro Europe is regulated by CySEC under license number 109/10 and is licensed to do business in any member states in the European Economic Area.

eToro Europe is also governed by the EUs Markets in Financial Instruments Directive (MiFID), which standardizes regulatory disclosures for all brokerages operating in the EU. MiFID also requires brokers to differentiate between professional and retail clients for the purposes of trading regulations. MiFID applies to stock and CFD trading on eToro.

Australia

eToro AUS Capital is regulated by ASIC under Australian Financial Services License 491139. ASIC is Australias primary financial regulator, similar to the FCA in the UK. It ensures that brokerage firms like eToro comply with all Australian trading regulations.

eToro User Protection & Compensation

In the event of a breach, hack, or other loss of client funds at eToro, customers are protected by insurance and compensation schemes. We‘ll take a closer look at the protections available to clients in eToro’s largest jurisdictions.

USA

In the US, eToro customers are protected by FDIC and SIPC insurance. FDIC insurance protects cash deposits up to $250,000. All cash in your eToro account is held at an FDIC member bank. US stock investments are protected by SIPC insurance up to $500,000.

In addition, eToros clearinghouse, Apex Clearing Corporation, holds additional insurance that covers all stock and ETF investments held with eToro. This policy covers up to $150 million in total losses, up to $37.5 million for securities and $900,000 for cash for any single customer.

UK

In the UK, all cash deposits, stocks, ETFs, and CFD investments are protected under the UK‘s Financial Services Compensation Scheme (FSCS). This provides up to £85,000 per person. Note that crypto CFDs are covered under the FSCS, but outright cryptocurrency holdings are not. So if you’re planning to buy cryptocurrency youll need to bear this in mind.

eToro also has an additional insurance policy from Lloyds of London that provides up to £1 million in the event that eToro becomes insolvent. This insurance covers cash, CFD positions (including crypto CFDs), and securities.

Europe

eToro Europe clients are protected by the Investor Compensation Fund, which is overseen by CySEC. This fund provides up to €20,000 in insurance for each investor for cash, CFDs, and securities.

eToro Europe clients are also covered by a €1 million insurance policy from Lloyds of London.

Australia

Cash deposits with eToro AUS Capital are insured by the Australian Financial Claims Scheme (FCS) for up to $250,000 AUD. Looking to invest in cryptocurrencies in Australia？ The FCS does not insure securities, CFDs, or cryptoassets.

eToro AUS Capital also has a $1 million AUD insurance policy from Lloyds of London, which insures cash, CFDs, and securities.

How eToro Protects Your Account

While having insurance in place in the event of a catastrophe is important, its significantly better if your brokerage or crypto exchange never faces a serious security breach. eToro has invested heavily in security to protect customer accounts.

Data Encryption

All data that you transfer to eToro or that eToro transfers to you is encrypted using the Transport Layer Security (TLS) protocol. The company also has internal firewalls to prevent employees from transferring money between crypto cold storage wallets.

2-factor Authentication

eToro supports 2-factor authentication (2FA) for all accounts. You can turn on 2FA from your account settings. When 2FA is enabled, you must have your mobile device in addition to your username and password in order to log into your account.

Network Monitoring

eToro has a professional security operations center that monitors its digital network around the clock. This center is staffed by cybersecurity professionals who can recognize attacks on eToros firewall and take steps to proactively stop them.

eToro also runs a Vulnerability Disclosure Program on HackerOne. This allows anyone to report issues with eToros security so that the platform can consistently improve its defenses.

Is the eToro Crypto Wallet Secure？

eToro offers its own crypto wallet app for iOS and Android called eToro Money. You can easily transfer cryptocurrencies back and forth between your eToro trading account and your eToro crypto wallet.

Within the wallet, you can swap between more than 500 crypto-crypto pairs at any time, which enables you to trade seamlessly for many top altcoins. You can also send and receive crypto.

Notably, the eToro wallet also supports crypto staking. Staking is available for Ethereum, Cardano, and Tron.

eToro offers several security features to help ensure your crypto is safe in the eToro Money crypto app:

2-Factor Authentication

eToro supports 2FA for the eToro Money app, providing an additional layer of security in addition to your encryption key.

Adaptable Security

eToro uses digital signatures and machine learning to understand the normal pattern of use for your wallet. When unusual login activity is detected, eToro can challenge the login or alert you to activity in your crypto wallet.

In addition, the eToro Money app offers important security features like protection against distributed denial-of-service (DDoS) attacks and standardization protocols.

Private On-Chain Addresses

The eToro wallet enables you to store, receive, and transfer your cryptocurrency anywhere on the blockchain. Your personal and unique wallet address is stored privately on-chain. eToros private key service helps you recover access to your crypto wallet, making your private key unlosable.

Your wallets private address is not enough on its own for an attacker to access your wallet, but it could make your wallet a target. eToro never shares the private addresses for any of its wallets.

eToro Wallet Availability

The eToro Money app is only available in approved countries, which includes the US, UK, most European countries, Australia, and others. Your account must be fully verified in order to use the wallet, which means providing a phone number and completing all know your customer (KYC) requirements. Depending on your location, these requirements may include uploading a copy of your passport or national ID.

Are Payments Secure on eToro？

eToro uses Transport Layer Security encryption when processing payments online. eToro is fully compliant with Payment Card Industry (PCI) requirements.

In addition, eToro accepts deposits by credit and debit card and is one of the only firms that lets you buy Bitcoin with a credit card with no processing fees. Most cards come with fraud prevention and you are not held liable for fraudulent charges on your card.

Is eToro a Listed Company？

eToro is in the process of becoming a publicly traded company. The platform is expected to undergo a reverse merger with FinTech Acquisition Corp. V, a publicly traded special purpose acquisition company (SPAC) on the NASDAQ stock exchange (ticker symbol FTCV). The merger has been postponed but is expected to close in 2022.

The merger will yield roughly $900 million in new investment for eToro, which the company can use to offer additional investments and further invest in platform security. In addition, the merger demonstrates that eToro is a mature, well-known company that investors believe has a bright future ahead. The deal values eToro at more than $10 billion, and investors – including several hedge funds – are betting that eToro will be worth more in the future.

More broadly, being a publicly listed company makes eToro more trustworthy. As a public company, eToro must regularly report on its financial health and make its finances available to investors. The company is incentivized to reduce risks, such as security risks, that could negatively impact customers and harm eToros value in the eyes of investors.

How Many People Use eToro？

As of the 3rd quarter of 2021, eToro reported more than 24.8 million users. The platform had only 13 million users at the start of 2020 and experienced rapid growth as retail trading boomed during the COVID-19 pandemic. Today, eToro is one of the largest online trading platforms in the world for investing in Bitcoin and other cryptocurrencies.

eToro Customer Service & Contact

eToro offers customer support by live chat and an online ticket system. You must be logged into your account to access live chat. Tickets can be opened online with or without an eToro account and responses typically take 24-48 hours.

eToro also offers an online help center where you can find answers to common questions. Help articles address topics like how to open and verify an account, how to make deposits and withdrawals, and how to use eToros trading tools. The articles are easy to read and clearly explain the steps needed to complete each task.

How to Keep Safe When Trading with eToro

eToro has strong security measures in place to help you stay safe while trading. However, there are a few things that you can do on your own to ensure that your account remains secure:

• Choose a Unique Password. Your eToro password should be as strong as possible. Use a password generator rather than an easy to guess word or phrase. Never use your eToro password on another website.

• Enable 2FA. 2-factor authentication is one of the strongest security measures available to protect your eToro account. You can turn on 2FA in your account settings.

• Watch Out for Phishing. Attackers can send you fake emails and messages to try to get you to log into your eToro account. If you receive a message and you‘re not sure if it is safe, contact eToro’s support team to ask if they sent the message.

• Scan Your System. Viruses and malware on your computer can expose your passwords to attackers. Keep your operating system and browser up to date and run frequent antivirus scans.

Bottom Line

We set out to answer the question: is eToro legit？

eToro is a global brokerage with more than 25 million users and $9.4 billion in assets under management. The platform is regulated by top-tier financial authorities in the US, UK, Europe, and Australia. In addition, eToro has proactively put strong security measures and insurance policies in place to ensure that client funds remain safe at all times.

Based on all of this, eToro is worthy of your trust. Create an account today to start buying stocks, ETFs, forex, cryptocurrencies, and more.