Australian Regulator Takes Legal Action Against eToro Over High-Risk and Volatile Trading Products

The Australian Securities and Investments Commission (ASIC) has filed a case in the Federal Court against the online investing platform eToro Aus Capital Limited about the suitability of eToro’s target market for contract for difference (CFD) products.

The case is being brought about the appropriateness of eToro’s target market for CFD products. The Australian Securities and Investments Commission (ASIC) asserts that eToro’s target market for contracts for difference (CFDs) was far too wide for such a high-risk and volatile trading product, and that the platform used inadequate screening measures, which resulted in violations in the company’s design and distribution duties.

Customers are given the opportunity to speculate on the value of underlying assets via the use of CFDs, which are leveraged derivative contracts. The conduct of eToro, according to ASIC’s assessment, undoubtedly exposed a substantial number of retail customers to CFD products that were not suitable for their investment goals, financial status, or requirements, which resulted in a considerable risk of consumer damage.

Trading contracts for difference (CFDs) resulted in financial loss for roughly 20,000 of eToro’s customers between October 5, 2021 and June 14, 2023. According to the information provided on the eToro website, the majority of retail investor accounts on the platform end up losing money when they trade CFDs.

Sarah Court, the deputy chair of ASIC, expressed her dissatisfaction in what is purported to be a lack of compliance on the part of eToro and stressed that CFD issuers are required to conform with the design and distribution framework.

In addition to this, she emphasized the need of limiting the scope of CFD target markets in order to avoid suffering major financial losses. The Australian Securities and Investments Commission (ASIC) has leveled a number of claims, and eToro has said that the company is exploring how to react.

Since then, the company has made some adjustments to their CFDs target market assessment, and they have stated that there would be no effect on their service or interruption to their overall operation. eToro places a strong emphasis on its commitment to complying with regulatory requirements and working closely with them.

The Australian Securities and Investments Commission (ASIC) has in the past taken administrative action to safeguard customers from high-risk CFD trading, such as placing stop orders against other businesses.

This case highlights regulatory issues about the management of high-risk CFD products as well as the possible hazards that are presented to ordinary investors. As the legal procedures progress, a careful eye will be kept on eToro’s reaction as well as any following steps it takes.

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BDSwiss Expands Crypto Offerings, Launching 9 New CFD Products

BDSwiss, a leading investment firm offering Foreign Exchange (Forex) and Contract For Difference (CFD) investment services to clients worldwide, announced on Monday that it has expanded its cryptocurrency offering with nine new CFD crypto-pairs.

BDSwiss’ existing crypto products include some largest cryptocurrencies by market cap, paired against the EUR and the USD.

The firm said that it launched the new digital assets as a result of increased demand from customers trading crypto CFDs on its BDSwiss platforms.

BDSwiss further stated that the newly listed coins are some of the most sought-after cryptos associated with the latest decentralized technologies including Smart Contracts, DeFi, NFTs, DApps, and the Metaverse.

The firm disclosed that the 9 new CFD crypto pairs include Decentraland (MANAUSD), Quantum (QTUMUSD), Stellar (XLMUSD), Polkadot (DOTUSD), Cardano (ADAUSD), Solana (SOLUSD), Axie Infinity Shards (AXSUSD), Gala (GALAUSD), and DOGE (DOGEUSD).

With this latest addition, the investment company said that the total number of cryptocurrencies available for trading on its BDSwiss MetaTrader, WebTrader and Mobile app platforms now stands at 26 crypto-pairs.

However, the firm clarified that the cryptocurrency offering is only available under the brand’s BDS Markets and BDS LTD entities which operate outside the European Union.

Nicolas Shamtanis, BDSwiss CEO, talked about the development and said: “In light of the strong demand for crypto trading, we’re delighted to now offer our clients an even wider selection of cryptocurrency pairs. Following on our commitment to offering world-class trading and investing experience, at BDSwiss we will continue to innovate and expand our wide range of financial services and underlying assets in line with our clients’ needs and the dynamic demands of the market.”

Democratizing Finance

BDSwiss was established in 2012 in Switzerland. Since then, the investment manager has become an international brokerage firm that has managed to count more than 1.5 million clients from over 186 countries.

In line with its mission to democratize finance for everyone, the company has continued launching innovative products designed to fulfil clients’ demands.

According to BDSwiss, all of its CFD crypto-pairs are available with 24/7 market access, whereby investors benefit from its leveraged trading, which magnifies losses and profits. Such cryptocurrency CFD trading provides customers with flexible trade sizes from less than $1 (depending on the underlying crypto) as well as the option to go long and short in order to maximize trading opportunities.

Early last month, the firm launched a new performance analytics tool – Trade Companion – which provides customers with insights to analyze, monitor, and improve their personal performance.

BDSwiss’ live trading accounts advanced charting tools and automated market scanners like Autochartist and Trading Central provide customers with real-time insights and alerts on forming price trends and potential entry and exit points.

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