eToro, a platform known for its cryptocurrency-friendly trading capabilities and social investment features, has confidentially filed for an initial public offering (IPO) in the United States, targeting a valuation of $5 billion. This move is aimed at expanding eToro’s investor base beyond its primary market in the United Kingdom.
The decision to file for an IPO in the U.S. comes after eToro raised $250 million in a funding round in 2023, which valued the company at $3.5 billion. The increase to a $5 billion valuation for this IPO reflects the company’s growth and the favorable market conditions for tech and crypto-related firms. The IPO filing was made confidentially with the U.S. Securities and Exchange Commission (SEC), allowing eToro to prepare for its public offering before revealing detailed financials and other specifics.
Several leading financial institutions, including Goldman Sachs, Jefferies, and UBS, are assisting eToro with this IPO process. This strategic step is seen as an attempt to capitalize on the growing interest in retail investing platforms, particularly those offering cryptocurrency trading, following a period where crypto markets have seen significant highs.
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This isn’t eToro’s first attempt at going public. In 2021, the company planned a $10.4 billion merger through a SPAC (Special Purpose Acquisition Company), but that deal fell through due to unfavorable market conditions. However, the current environment, characterized by a crypto market rally and a potentially more crypto-friendly administration in the U.S., seems to have provided a more conducive backdrop for eToro’s latest public offering endeavor.
This IPO also follows a regulatory settlement with the SEC in September 2024, where eToro agreed to cease trading most crypto assets in the U.S. due to violations of federal securities laws. Despite this, the company is pushing forward, aiming to leverage its diverse asset portfolio and social investment features to attract a broader investor base.
eToro agreed to pay a $1.5 million penalty to settle charges that it operated as an unregistered broker and an unregistered clearing agency concerning its cryptocurrency offerings since at least 2020. The settlement was part of broader SEC efforts to enforce securities laws within the crypto space.
As part of this settlement, eToro agreed to stop offering nearly all cryptocurrencies to its U.S. customers. Now, U.S. users of eToro are limited to trading only Bitcoin, Bitcoin Cash, and Ether (ETH). This restriction was implemented due to the SEC’s assertion that many cryptocurrencies traded on eToro were securities and did not comply with federal securities registration requirements.
U.S. customers had the opportunity to sell or transfer their holdings in other cryptocurrencies to eToro’s crypto wallet for supported coins. Any positions that couldn’t be transferred were slated for liquidation by mid-March 2025, affecting less than 3% of the total dollar value of U.S. customers’ crypto assets.
The exact timeline for the IPO is not public, but there are indications that eToro might list on the New York Stock Exchange as early as the second quarter of 2025. This move could position eToro to compete more directly with other platforms like Robinhood, especially in the U.S. market, where interest in cryptocurrency and retail trading continues to grow.
eToro expressed optimism about future regulatory clarity in the U.S., hinting at plans to re-enable trading for additional crypto assets once a clearer regulatory framework is established. This reflects the company’s commitment to compliance while continuing to serve its U.S. customer base with other financial products like stocks, ETFs, and options.