eToro May Freeze Cryptocurrency Purchases Due To High Volatility
eToro gears up for weekend activity
The service may temporarily cancel placing buy orders
EToro clients intend to sue the company over restrictive measures
International consortium of news organizations developing transparency standards.
Brokerage company eToro is considering the possibility of limiting the purchase of cryptocurrency in the event of a surge in trading activity
Social trading platform and brokerage intermediary eToro is considering limiting functionality due to trading activity. Bloomberg writes about this, referring to the company’s mailing list to its customers.
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The “unprecedented” demand for cryptocurrency, combined with limited liquidity on eToro, reportedly makes it impossible to maintain buy orders on weekends..
“Because of this, we may need to set limits on orders to buy cryptocurrencies on weekends,” the company said..
EToro noted that high activity remains due to the nature of cryptocurrency trading sessions, which are available 24/7 unlike traditional financial markets..
In the event that trading activity grows to a recent level, when bitcoin fell by 20% per day, the broker may temporarily cancel the placement of orders for the purchase of cryptocurrency, writes Bloomberg.
However, this will not be eToro’s first cryptocurrency-related incident. Earlier, the broker’s European clients accused the service of closing cryptocurrency contracts for difference (CFDs) without the ability to increase the margin to 100%.
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Later, Yuri Toplak, a spokesman for those affected by the restrictions, said that customers of the service would apply to the Cyprus Securities and Exchange Commission to revoke eToro’s brokerage license..
As of 2021, eToro has over 17 million users. Despite its age (the company was founded in 2006), eToro still felt the pressure of bitcoin. However, eToro is far from the only company in the cryptocurrency market that cannot handle the influx of trading activity..
The BeInCrypto editors reported that the popular American cryptocurrency exchange Coinbase has repeatedly gone offline amid a surge in bitcoin volatility. Some users later suspected the exchange of deliberate technical interruptions, mimicking the insurance leverage used on traditional stock exchanges..
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