Is Copy Trading / Social Trading a Sophisticated Scam?
The article ‘Etoro Review’ is a Forex broker review, written by Law Firm Mikov & Attorneys, a member of Financial Fraud Lawyer. Financial Fraud Lawyer is a network of fraud lawyers and Crypto lawyers specializing in Forex scam, Crypto scam, and lost funds recovery.
The purpose of the article “Etoro Review’’ is to summarize the current status of Etoro (Europe) Ltd. Financial Fraud Lawyer proposes an understanding of Etoro. Etoro review is based on public sources, such as Etoro website and the Cyprus Securities and Exchange Commission’s information (CySEC).
Etoro Review: Legal Entity and Affiliated Companies
Etoro’s previous name was RetailFX Ltd and was founded in 2007 in Tel Aviv, by brothers Yoni Assia and Ronen Assia together with David Ring.
Etoro has registered offices in Israel, the United Kingdom, the United States, Australia, and Cyprus.
Etoro Review: CySEC License Information
License Number: 109/10
License Date: 14/01/2010
Company Registration Number: 200585
Etoro Review: Approved Domains in the EU by CySEC:
www.Etoro.com; Etoro.lv; Etoro-forex.co.il; Etoro.ae; Etoro.com.cn; Etoro.es; Etoro.fi; Etoro.fr; Etoro.nl; Etoro.pt; Etoro-forex.de; Etoro.ca; Etoro.de; Etoro.gr; Etoro.hu; Etoro.it; Etoro.jp; Etoro.ru; www.retailfx.net;www.Etorowhu.com; www.copytrader.com; www.Etoro-forex.cn; www.Etoro.cl; www.Etoro.cn; www.Etoro.co.uk; www.etourui.com; www.yitourui.com; Etoro-china.com; Etoro-cn.com;Etoro-forex.es; Etoro-forex.fr; Etoro-forex.it; Etoro-forex.ru; Etoro.com.mt;Etoro.no; Etoro.pl; Etorochina.com;Etorochinese.com; Etorocn.com; retailfx.ae; retailfx.com; retailfx.es; retailfx.ru
ETORO Review: Activity Area
• Etoro was founded in Tel Aviv, Israel, by Yoni Assia and Ronen Assia, and David Ring.
• Etoro (Europe) Ltd. is registered in Cyprus with the CySEC
• Etoro (Europe) Ltd. is registered in The UK with the FCA
• Etoro (Europe) Ltd. is registered in Australia with the ASIC
• Etoro is prohibited to provide its services to residents established in countries listed below
Etoro Review: Prohibited Countries
Etoro is not allowed to provide its services to residents established in the following country:
Belgium, Brazil, Canada, Cuba, Iran, Japan, South Korea, Syria, Turkey, and the USA.
Etoro Review | Home page– General Risk Disclosure screen capture from Etoro homepage website, https://www.Etoro.com/en-gb/Etoro, Sept 25, 2020
Etoro Review: Copy Trading or Social Trading, What is the Regulation in the EU?
According to Etoro website, copy trading consists of ‘’copying” a trader strategy in trading.
According to the FCA, copy trading allows traders to trade by copying another investor’s trades. If the copy is generated automatically, the financial authority regulator generally classifies Copy Trading as a portfolio or investment management.
Etoro review shows that the FCA classifies copy trading as portfolio or investment management where no manual input is clear from the account holder.
Etoro Review: Mirror Trading and Copy Trading
Mirror trading is like copy trading but with minor differences. In fact, mirror trading may involve copy, but it involves generally automated trading based on fixed strategies and preferences. therefore, mirror trading and copy trading are the roots of the so-called social trading.
Etoro Review: Copy Trading, Mirror Trading and Portfolio Management
As stated in the European Securities and Markets Authority’s (ESMA) MiFID Questions and Answers: Investor Protection & Intermediaries social trading is an automatic execution of trade signals. So, it could be considered as portfolio management in some situations as the financial platform is responsible for the automatization of the execution. To some extends, social trading or copy trading could be an indirect way to manage traders ‘accounts. (see Etoro Review sources)
Etoro Review: What are Etoro’s Legal Obligations?
The Markets in Financial Instruments Directive – MiFID – requires regulated brokers to follow three guiding laws when providing investment services. The present Etoro Review summarizes it as follow:
• To act in an honest, fair, and professional way and to serve the best interests of traders;
• To provide adequate, complete, correct, transparent information;
• To analyze the trader’s individual situation (e.g., his needs, requirements, and knowledge of trading financial products).
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ETORO Review | Home page– screen capture from ETORO homepage website, https://lp.Etoro.com/en-gb/t1/trading-for-living/v1/ffv/, March 25, 2020
ETORO Review: CySEC sanctioned Etoro
The Cyprus Securities and Exchange Commission informed the public that pursuant to weaknesses in the application of the Investment Services and Activities and Regulated Markets Law, the Cyprus Securities and Exchange Commission, reached a settlement with Etoro (Europe) Limited, for the amount of €50.000.
Etoro Review investigations show that Etoro has paid the amount of €50.000 on 12 February 2013 as a settlement with the CySEC.
ETORO Review | CySEC Home page– screen capture from CySEC homepage website, https://lp.Etoro.com/en-gb/t1/trading-for-living/v1/ffv/, March 25, 2020
Sources used in ETORO Review:
Etoro Review source 1 – Cyprus Securities and Exchange Commission – CySEC Investment firms’ information: https://www.cysec.gov.cy/en-GB/entities/investment-firms/cypriot/37610/, June 25, 2020
Etoro Review source 3 – Forex Peace Army – Etoro review https://www.forexpeacearmy.com/forex-reviews/5004/Etoro-forex-brokers, June 25, 2020
Etoro Review source 4 – DIRECTIVE 2014/65/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL – MiFID – https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0065, June 25, 2020
Etoro Review source 5 – Cyprus Securities and Exchange Commission – Etoro review – The CySEC sanctioned Reliantco Investments. source: https://www.cysec.gov.cy/CMSPages/GetFile.aspx?guid=3795a0ff-a515-4c34-b5a1-d9c03d7a3288 June 25, 2020
Etoro Review source 6 – Cyprus Securities and Exchange Commission https://www.cysec.gov.cy/en-GB/public-info/decisions/ June 25, 2020
Etoro Review source 7 – Law Firm Mikov & Attorneys – https://www.mikov-attorneys.com June 25, 2020
Etoro Review source 8 – ESMA Europe default Library – MiFID Questions and Answers Investor Protection & Intermediaries https://www.esma.europa.eu/sites/default/files/library/2015/11/2012-382.pdf
Etoro Review source 9 – CySEC – Regarding settlement reached with Etoro (Europe) LimitedModified: 21/10/2014 https://www.cysec.gov.cy/CMSPages/GetFile.aspx?guid=88e2e859-dd97-4955-841d-7a2a7d408416
Etoro Review. Disclaimer. Fraud lawyers at Firm Mikov & Attorneys and the author of this Etoro Review are regularly engaged in the collection and dissemination of information to the public. This Etoro Review aims to share experience and warn the interested parties. Etoro Review was written in good faith, based on public information, dating from September 2020.