Last week, eToro announced big changes. Users could purchase XRP using their ordinary eToro brokerage account. Unfortunately, users were quickly outraged when they discovered they could purchase eToro – but not actually use it.
The first tweet against this issue appeared last week from Tiffany Hayden. As spotted by Ethereum World News, here’s what Tiffany Hayden had to say about the issue:
“You can purchase $XRP from @etoro, but you can’t actually have it or transfer it or anything crazy like that. Oh, and eToro might convert it into a CFD without your permission, but it’s still totally yours. Really. So handover your credit card info and just be cool. #XRPCommunity”
Although this sounds bad, some users pointed out that Tiffany and other users had just failed to read the fine print. eToro had clearly outlined the conditions of their XRP accounts in the fine print of the agreement.
As pointed out by John Cherry (@john_cherry1970) on Twitter, eToro has the following clause in its Terms and Conditions:
“You authorize eToro to lend, as your agent, to ourselves or others any cryptocurrencies held by us for your benefit and neither we nor they shall have any obligation to retain under our or their possession and control a similar amount of such cryptocurrencies. In connection with such loans, we may receive certain benefits to which you shall not be entitled.”
In other words, eToro is allowed to do basically whatever they want with your cryptocurrencies. And, it appears they’re not even guaranteeing that users will receive the same amount of XRP they purchased. If eToro lends out your XRP and someone fails to pay back that loan, then everyone loses.
eToro’s XRP purchasing service is only available for users funding their accounts via wire transfers. Depending on your region and account level, you may be required to make a minimum first-time deposit of $200 to $10,000.
In response, users are (understandably) cashing out their XRP from eToro. One user tweeted that he was buying XRP via Wirex instead.
eToro has responded to XRP investors. In a lengthy blog post, eToro CEO Yoni Assia clarified the company’s handling of XRP. Assia described how the company offers brokerage services and must adhere to certain brokerage service requirements:
“eToro is a regulated broker offering clients a broad range of assets to trade and invest in. As a regulated brokerage service, eToro EU and eToro UK allows users to trade and invest in the global markets but does not offer third party payments, meaning clients can only deposit and withdraw fiat from their personal accounts.”
Assia also specifically touched on the issue with XRP investors on eToro being unable to access the wallet services.
“The new eToro wallet is provided by eToroX Ltd. whom is regulated by Gibraltar Financial Services Commission (GFSC) under their distributed ledger technology (DLT) regulation…The wallet is a NEW product created by eToroX. While it integrates with the eToro platform, they are separate applications and offer different features.”
eToro Gold Members Will Be Able to Transfer Crypto Shortly
The most important part of the blog post is the fact that changes are coming. eToro has announced that Gold and above members will soon be able to transfer cryptoassets on eToro:
“At first, the transfer of crypto assets from the eToro platform to the wallet will be available for eToro Gold and above members only, and will be limited to the amount of money that has been deposited via wire transfer.”
The fact that you can only transfer the amount of money that you initially deposited is interesting. If you buy $10,000 of XRP via wire transfer and the value of XRP increases to $13,000, then can you still only withdraw $10,000? That appears to be the case.
“Support for XRP in the wallet is currently in the advanced stages of testing and will launch by the 25th December 2018.”
It’s unclear when users below Gold will receive the ability to transfer cryptocurrencies. However, it appears eToro is moving through the testing phase with the expectation that support will launch shortly.
Ultimately, this is still very good news for the crypto community that users can purchase XRP easily using eToro. Sure, there have been some mild growing pains, but this is still a big deal. eToro is also known in the crypto community for its Cryptocurrency CopyPortfolio, which holds 87.62% bitcoin and 12.38% Ethereum. The fund is down 67.95% over the last 12 months but allows investors to easily purchase a stake in crypto.