Australian regulator sues eToro for trading CFDs
The Australian financial regulator ASIC is suing the financial platform eToro due to the use of a high-risk leveraged derivative contract product, known as a CFD. ASIC started the legal proceeding against eToro. It alleges that the company breached design and distribution obligations and failed to act efficiently, honestly, and fairly. CFDs allow users to create speculation related to changes in the value of an underlying asset, such as stock market indices, stocks, forex, and cryptocurrencies. You might also like: ASIC releases the top 10 ways to spot a crypto scam The regulator said that eToro didn’t do enough testing on the product before releasing it to retail investors. The financial regulator said: “eToro’s screening test was very difficult to fail and of no real use in excluding customers for whom the CFD product was not likely to be appropriate.” ASIC said that between October 5, 2021, and June 14, 2023, nearly 20,000 eToro users were...