Home Finance Is eToro safe? An answer to this rising question among investors

Is eToro safe? An answer to this rising question among investors

by Paul Watsdon

Whenever a person decides to start investing his money, first concern will always be: is my money in safe hands?

This is going to be the first question everybody is going to ask themselves, even before asking if his investment is going to work well or not. Actually, checking every aspect and detail of even the most renowned and recognized Forex broker is a common behaviour. Even better: it’s healthy behaviour.

That’s why today we are going to answer a question which may seem odd at first glance, but that everybody asked to himself at least once: how safe is eToro today?

How Safe Is eToro: Regulation

Before putting our capitals in the hands of a brokerage service, we should always check their reference and if they are regulated by a financial regulatory body.

First reason why eToro is considered a safe broker is because they are actually a very well-regulated broker with different entities, each one regulated by a top tier regulatory agency.

eToro is divided in the following legal entities and regulated by:

  • eToro AUS Capital Pty Ltd: authorised by the Australian Securities and Investments Commission (ASIC). This regulation permits eToro to provide financial services in Australia under Australian Financial Services License number 491139.
  • eToro (Europe) Ltd.: authorized in the Republic of Cyprus with registration number HE20058 and regulated by one of the main regulatory bodies of the European Union, the Cyprus Securities & Exchange Commission (CySEC) with license number 109/10.
  • eToro (UK) Ltd: authorized in the United Kingdom by the Great Britain national authorities of the Financial Conduct Authority (FCA) with company reference number 583263.
  • eToro USA LLC: authorized in the US as a Money Services Business and registered with Financial Crimes Enforcement Network (FinCEN).

How Safe Is eToro: Funds

In terms of economic security, eToro has decided to implement for their customers a segregated funds system.

This choice was taken in order to prevent traders funds from mixing with any other funds not related to the selected customer, including eToro’s money. It means that if the broker bankrupts, liquidators will not take any money from the broker customers funds.

Segregated accounts deposits are to be found in top tier banks around the world.

Negative balance protection is also offered for standard accounts. That’s because having these features are required by most regulatory bodies in order to receive their licenses.

How Safe Is eToro: Account Verification

Some people seem to be upset by the fact that they cannot withdraw their funds.

This happens usually because eToro works in a way that you can deposit your money if you want, but you can’t withdraw them if you do not complete your account verification.

Account verification is a standard procedure that keeps eToro platform secure and prevents it form any untoward activity.

In order to verify your account and enjoy eToro full benefits you will be required to upload a:

  • Proof of identity (POI): your POI document must contain your name, date of birth, a photograph and an issue date clearly visible. A passport is the best example and preferred POI to upload, and the quickest to be processed and recognized.
  • Proof of Address (POA): your POA document must contain your full name, address and issue date, and it cannot be older than 6 months. Name or log must be clearly visible. A Bank Statement or a bill are good examples of POAs.

Once finished, you will be notified when your account is verified. The verification process is usually a few days long, but you can also follow your verification status on the eToro platform.

You should also remember that verified accounts have a green tick next to their usernames checkable on the user’s profile.