EToro

eToro is an Israeli social trading and multi-asset brokerage company that focuses on providing financial and copy trading services such as forex and crypto. It has registered offices in Cyprus, the United Kingdom, the United States, and Australia. In January 2022, the company's value was $8.8 billion.

History
eToro was founded as RetailFX in 2007 in Tel Aviv, by brothers Yoni Assia and Ronen Assia together with David Ring.

In 2010, the firm released the eToro OpenBook social investment platform, along with its CopyTrading feature, that enables investors to copy the network's top traders automatically. Later that year, the firm released an Android app.

Between 2007 and 2013, the company raised $31.5 million in four rounds of funding. In December 2014, it raised $27 million from Russian and Chinese investors. In December 2017, it joined CoinDash to develop Blockchain-based social trading. In 2018, it raised a further $100 million in a private funding round. Overall, more than $162 million has been invested in the company by investment firms.

In 2013, the firm introduced the capability to invest in stocks and CFDs, with an initial offering of 110 stock products. The same year, it was authorized to offer services in the UK, under the subsidiary eToro UK. In January 2014, the firm added cryptocurrencies to its investment instruments.

In April 2014, the firm added 130 British and German stocks composing the FTSE 100 Index and the DAX30 indices to the company's stock selection. In 2017, it launched a CopyPortfolio feature, enabling investors to copy investment portfolios from the best-performing traders.

In 2018, eToro launched a cryptocurrency wallet for Android and iOS. In May 2018, it entered the US market by offering 10 cryptocurrencies: In November 2018, it announced the launch of GoodDollar, a non-profit, open-source community project aimed to reduce global wealth inequality through universal basic income (UBI) using DeFi technology on blockchain. In September 2021, eToro raised its stake in GoodDollar’s protocol from $58,000 to $1 million.

In March 2019, eToro acquired Danish blockchain company Firmo for an undisclosed sum. In October 2019, eToro released a sentiment-based crypto portfolio using AI technology to evaluate Twitter's current positive or negative impressions of digital assets. In November 2019, the firm acquired Delta, a crypto portfolio tracker application company, based in Belgium. In March 2019, the company launched its cryptocurrency trading platform and its standalone cryptocurrency wallet to US users.

In 2021, the company reported operating in 140 countries and having 20 million users. In March 2021, it announced that it is planning to become a publicly traded company through a reverse subsidiary merger with FinTech Acquisition Corp V (NASDAQ:FTCV), a Special Purpose Acquisition Company (SPAC) backed by former Bancorp CEO Betsy Z. Cohen. The combined company will operate as eToro Group Ltd and have an implied estimated enterprise value of $10.4 billion at closing with $650 million in funding coming from private investment in public equity (PIPE) from Softbank Vision Fund 2, Third Point, Fidelity Management, Wellington Management, ION Investment Group and Research Co.

In 2020, the company acquired Marq Millions, the UK division of e-money, which was then renamed to eToro Money. The company also obtained a primary membership of Visa and an electronic money institution (EMI) license from the Financial Conduct Authority. In December 2021, the company launched the eToro Money debit card for UK residents that includes issuing a VISA debit card to users.

In December 2021, eToro amended its agreement with FinTech Acquisition Corp. V to extend the merger agreement's termination date to June 30, 2022. Its SPAC valuation has been reduced from $10.4 billion to $8.8 billion due to market shifts and SPAC issues.

As of March 2022, eToro had 27 million users and 2.4 million financed accounts.

Operations
eToro's main research and development office is located in Tel Aviv, Israel. In addition to legal entities registered in the UK, US, Australia and Cyprus. The firm is regulated by the CySEC authority in the EU; it is authorized by the FCA in the UK, and by FinCEN in the United States, and by the ASIC in Australia. In 2013, it was fined €50.000 by CySEC due to detected weaknesses which concerned its organisation and operation structure back to 2010. In 2015, eToro was added to Quebec blacklist as an unauthorized foreign company that encouraged residents to invest in binary options via its trading platform.

Marketing and expansion
In August 2018, eToro announced a sponsorship deal with seven UK Premier League teams including Tottenham Hotspur, Brighton & Hove Albion F.C., Cardiff City F.C., Crystal Palace F.C., Leicester City F.C., Newcastle United F.C., and Southampton F.C. The partnership continued for the 2019-20 Premier League with Aston Villa F.C. and Everton F.C. joining Southampton F.C., Tottenham Hotspur F.C., Crystal Palace F.C., and Leicester City F.C.

In 2019, the company had sponsorship agreements with the American KTM team of MotoGP, the Ultimate Fighting Championship, French tennis player Gael Monfils and German football club Eintracht Frankfurt. In 2020, it launched twelve sponsorship deals with the UK, German, French and Danish sport clubs, including West Bromwich Albion, Burnley FC, FC Augsburg, 1. FC Cologne, Hamburger SV (Bundesliga 2), Union Berlin, VfL Wolfsburg, AS Monaco and FC Midtjylland. In October 2020, Rugby Australia announced that eToro would be a Presenting Partner for the 2020 Tri Nations rugby series, expanding it in 2021 to be the major partner for three years.

2022 closure of positions in MGNTL.L (Magnit PJSC)
On March 2, 2022, eToro triggered a stop loss closure of investor positions in the stock MGNTL.L at $0.01 per share. eToro representatives claimed that the positions had reached a “default” and “mandatory” stop loss of $0.01 per share. There was backlash on eToro and the platform reinstated the positions later on the same day.

Connections were drawn to a similar incident in July 2021, where positions in RYAAY (Ryanair Holdings plc) were sold without permission for $0.01 a share.

On March 3, 2022, eToro notified holders of various Russian-based stocks that their positions in MGNTL.L would be closed “due to liquidity problems” and the "impact of the current geopolitical events on markets”. Other Russian-based stocks would also be reviewed for potential liquidation.

On Friday, 4th of March 2022, all MGNTL.L positions were closed by eToro at around $0.0124 per share.

A public Telegram group [eToro Action] was formed during this period, in protest of the sudden closures. A petition was also put forth on change.org, for the rights to maintain open positions of stocks on eToro, amassing more than 1000 signatures in four days.

On the 7th of March 2022, eToro reimburses clients for the total initial invested amounts of MGNTL.L.

eToro officially disclosed that "On March 2nd, 2022, real stock positions of Magnit PJSC (MGNTL.L) were closed when a market price of $0.01 was reached. Due to an operational issue, this triggered an automatic sell of these shares. MGNTL.L has since been suspended from the markets. Therefore, we were unable to repurchase these holdings and MGNTL.L has since been removed from the eToro platform."

2021 closure of leveraged positions
On January 8, 2021, eToro notified its European clients that "due to extreme market volatility in the crypto markets, margin positions for all leveraged crypto positions" should be changed to nonleveraged, or they would be closed within four hours. A few hours later, the firm closed all leveraged positions.

Lawyers and users expressed intent to file a class action lawsuit and a motion to revoke eToro license in Cyprus. The firm said that this affected “two percent of users”. A law professor Jurij Toplak said he would gather users and file motion to revoke eToro license in Cyprus where it is registered.

2021 short squeeze
Following the GameStop short squeeze, retail investors on Reddit claimed that eToro changed the terms of service to enforce a stop-loss on non-leveraged buy positions that did not have it enabled. While stop-loss is designed to reduce risks on the volatile markets, the enforcement without notice allegedly caused losses for numerous clients that had their positions closed on unfavorable terms. Moreover, these Redditors claimed, by selling such a large volume, eToro had brought down the price of shares of GameStop and other companies favored by retail investors.