- ASIC takes legal action against eToro Aus Capital for breaching obligations.
- eToro’s target market for CFD products was deemed too broad, leading to consumer harm.
- Nearly 20,000 eToro clients lost money in CFD trading, ASIC claims.
Australian Securities and Investments Commission (ASIC) has taken a decisive step by initiating legal proceedings in the Federal Court against the local arm of the eToro crypto exchange, eToro Aus Capital Limited.
In a press statement today, ASIC accused eToro of flouting design and distribution obligations and failing to act efficiently, honestly, and fairly concerning its contract for difference (CFD) product.
Specifically, the case revolves around eToro’s target market and the screening test it employed to determine if a retail client fits within the CFD product’s ambit. ASIC contends that eToro’s target market was overly broad for a high-risk and volatile trading product, where most clients lose money.
Moreover, the regulator asserts that the screening test used by eToro was woefully inadequate in assessing a retail client’s compatibility with the target market.
According to ASIC, this failure to ensure a suitable targ…
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The post Australian Regulator Sues eToro Exchange for Breaching Obligations appeared first on Coin Edition.