eToro sued down under over 'wholly inadequate' customer checks

Australia’s financial regulator has claimed that trading platform eToro’s screening test is “far too broad” and that it was virtually useless in excluding customers for whom its high-risk derivative product wasn’t appropriate.

The Australian Securities and Investments Commission (ASIC) sued eToro Aus Capital Ltd. on Wednesday, claiming that it breached a number of distribution and license obligations relating to its contract for difference (CFD) product.

A CFD is a leveraged derivative contract that allows traders to speculate on the value of an underlying asset. These include foreign exchange rates, stock market indices, commodities, or Crypto.

In a statement, ASIC said: “eToro’s target market for the CFD product was far too broad for such a high-risk and volatile trading product where most clients lose money, and that the screening test was wholly inadequate to assess whether a retail client was likely to be within the target market.”

Among ASIC’s issues with eToro’s screening test was the fact that clients could change their answers however they wished and were prompted if they selected answers which could result in them failing.

According to ASIC, as a result, this is likely to have resulted in “a significant number of retail clients being exposed to the CFD product that was unlikely to be consistent with their investment objectives, financial situation and needs.”

This, it said, may have led to a significant risk of consumer harm.

Read more: Bug-riddled Twitter will display eToro’s crypto prices in-app

According to eToro’s website, 77% of retail investor accounts lose money when trading its CFDs with eToro. ASIC’s statement claims that between October 2021 and June this year, almost 20,000 of eToro’s clients lost money trading CFDs.

eToro is said to be considering the allegations and has reassured users that “there is no impact or disruption of service for clients of eToro Aus,” (via The Block).

Got a tip? Send us an email or ProtonMail. For more informed news, follow us on Twitter, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.

Comments

Post a Comment

Popular posts from this blog

FTX Wallet Drainer Relentless: Bridges Another 5,624 ETH to BTC

CertiK Alert posted on October 4 that the FTX drainer bridged another 5,624 ETH to BTC. That follows a series of notifications of multiple activities by the hacker, recently. The latest amount adds to over 30,000 ETH already bridged by the FTX wallet drainer. CertiK Alert, a platform that provides real-time alerts about crypto hacks, posted on October 4 that the FTX drainer bridged another 5,624 ETH to BTC. That follows a series of notifications about the recent resurfacing of the hacker who stole a significant amount of funds from the defunct FTX exchange. #CertiKSkynetAlert The FTX drainer has bridged another 5,624 ETH to BTC Receiving wallets: Bc1q8…m7zcy Bc1qs…fyhdy Bc1q7…3tg27https://t.co/4J3l9hyvjX — CertiK Alert (@CertiKAlert) October 4, 2023 The recent alert comes after CertiK Alert had posted about the hacker bridging up to 30,000 ETH to BTC as of October 2, 2023. Over the weekend, the crypto industry observed renewed activity on the wallet
Read more

Sell the rumors… Buy hack announcements? Unibot retrospective

In the aftermath of a significant security breach affecting Unibot (UNIBOT), an unexpected twist in market psychology surfaced. A leading analyst on prominent crypto analytics platform Santiment dissected the curious case of Unibot price action following a hack, challenging the old adage of “sell the rumor , buy the news.” He wrote: Panic creeps in, you start getting doubts (especially having experience multiple blowups of projects before), maybe it’s just better to sell and wait it out? Looks like many UNIBOT holders felt those kind of feelings in the recent days. On Oct. 31st, a capitulation event was observed for Unibot as long-standing coins changed hands in response to panic stemming from a cryptic tweet by the coin’s developers. The subsequent sell-off resulted in the largest transaction volume spike for Unibot, accompanied by a noticeable increase in active addresses — a movement tracked closely by Santiment’s tools. If you read any UNIBOT-related threads on Twitter that
Read more

Here’s how to prevent NFT theft, according to industry professionals

Image
Professionals working in the Web3 space highlighted various tools and best practices to protect NFTs from hackers and scammers. As nonfungible tokens (NFTs) attract more users, they also capture the eyes of scammers. Bad actors in Web3 have set their sights on digital collectibles, with millions being lost through scams and various attacks.  However, according to professionals working in the Web3 space, there are multiple ways and tools to prevent being a victim of NFT theft . In addition, users can also take various actions after losing their digital collectibles to hacks. Ronghui Gu, the co-founder and CEO of blockchain Security firm CertiK, told Cointelegraph that the first and most important step is always due diligence. “Avoid clicking on suspicious links and be very careful when signing token approvals,” Gu shared. Taking it a step further, the executive shared other best practices like periodically checking and revoking unneeded permissions and segregating NFTs into differen
Read more