Quick wins for a faster PC:
Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →ASIC is suing eToro AUS Capital Limited over how it designed and distributed its retail contract-for-difference (CFD) product in Australia. The case remains ongoing, and the Federal Court has not made a final finding that eToro breached the law. ASIC has not announced a refund scheme for affected customers.
The proceeding focuses on eToro’s target-market determinations, customer screening and compliance with Australia’s design and distribution obligations—not on every investment product offered by eToro or on cryptocurrency trading generally.
What is the ASIC case against eToro?
The proceeding is Australian Securities and Investments Commission v eToro AUS Capital Limited, Federal Court of Australia file NSD 805 of 2023, in the NSW Registry’s Commercial and Corporations Division.
The defendant is the Australian company eToro AUS Capital Limited, ACN 612 791 803. It is not an action identified in the pleadings as being against eToro USA LLC.
The Tool Desk
Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →#1 Best Overall
- Heavy-Duty Metal Construction: Made from premium metal with a durable powder-coated finish for long-lasting strength, corrosion resistance, and a clean professional look
- Universal Stand Compatibility: Securely attaches to round tubes 0.8"2.1" (22mm - 52mm) and square tubes 1"1.5" (25mm - 40mm), making it compatible with most mobile TV stands and tripod speaker stands
- Tool-Free Adjustable Clamp: No tools required. Simply screw the adjustable clamp to securely clip the tray onto your desired stand in minutes
- Stable & Secure Platform: 10.8" x 22.8" rectangular tray provides a stable surface for AV equipment, laptops, mixers, speakers, projectors, or accessories
- Strong Load Capacity: Supports up to 15 lbs, offering reliable performance for both professional and home setups
ASIC alleges that eToro breached:
- Australia’s design and distribution obligations for financial products; and
- the obligation under sections 912A(1)(a) and 912A(5A) of the Corporations Act 2001 to provide licensed financial services efficiently, honestly and fairly.
Those allegations remain to be determined by the Court. The reported Federal Court decisions in the matter so far have dealt with interlocutory issues, including suppression orders and late expert evidence. They did not decide whether eToro contravened the law.
What ASIC says eToro did wrong
1. The target market was too broad
Financial firms must define the type of consumer for whom a product is appropriate. This is done through a target-market determination, commonly called a TMD.
ASIC says eToro’s CFD target market included some customers with a medium risk tolerance who did not have sufficient investment experience or an understanding of CFD risks. ASIC’s case is that this was inconsistent with the product’s high-risk and volatile nature.
In practical terms, the regulator argues that a customer could fall within eToro’s stated target market despite lacking the knowledge and experience needed to understand leveraged derivatives.
2. The customer screening test was too easy to pass
ASIC alleges that eToro used a screening process that did not reliably determine whether a retail customer belonged in the target market.
According to ASIC’s allegations, customers could:
- amend their answers without limitation; and
- receive prompts when an answer might otherwise cause them to fail the test.
The regulator says these features made the assessment difficult to fail. That is an allegation, not a finding that every customer passed the test or that every eToro account was opened unlawfully.
3. The TMDs did not adequately support distribution
ASIC’s further amended originating process alleges that eToro’s purported TMDs:
Recommended Free Tools
- relied on criteria that were not disclosed, or were not adequately disclosed;
- did not reasonably establish that CFDs were consistent with the likely objectives, financial situation and needs of the target market;
- contained distribution conditions whose content was uncertain or unstated; and
- did not make it reasonably likely that customers receiving the product under those conditions were actually within the target market.
The case therefore concerns more than a single questionnaire. ASIC is challenging the relationship between eToro’s product design, its written target-market documents and the way customers were allowed to access CFDs.
4. ASIC says distribution may have continued without a valid TMD
ASIC seeks a declaration that eToro engaged in retail product distribution conduct without first making a legally valid target-market determination. The pleaded period begins on 5 October 2021. The amended pleading contains different end dates in its procedural history and requested relief, so no single unqualified end date should be stated without checking the operative pleading.
Why CFDs are considered high risk
A contract for difference is a leveraged derivative. Rather than buying the underlying asset, the customer speculates on whether its price will rise or fall. The underlying reference may be a currency pair, share, market index, commodity or crypto-asset.
Leverage means a relatively small deposit can control a much larger position. That can magnify gains, but it can also magnify losses quickly. Costs such as spreads, financing charges and trading fees can further affect the result.
ASIC said that, between 5 October 2021 and 14 June 2023, almost 20,000 eToro clients lost money trading CFDs. It also quoted eToro’s website disclosure that 77% of retail investor accounts lose money when trading CFDs with eToro.
The nearly 20,000 figure is ASIC’s allegation about customer losses. It is not a Court finding that each loss resulted from a legal contravention, nor does it establish that customers were defrauded.
Rank #3
- Mounts on steering wheel for in-vehicle usage.
- Spacious platform holds laptops and tablets stably.
- Lightweight design for easy carrying during travel.
- Quick installation supports immediate use.
- Works with most for daily travel work.
What ASIC is asking the Court to do
ASIC’s further amended originating process seeks:
- declarations that eToro contravened the Corporations Act;
- pecuniary penalties payable to the Commonwealth;
- orders requiring eToro to notify relevant Australian customers about the Court’s declarations, the alleged screening deficiencies and complaint pathways;
- restrictions on allowing relevant customers to trade the CFD product unless eToro has a valid TMD and takes reasonable steps to distribute the product consistently with it; and
- costs and any further orders the Court considers appropriate.
ASIC has not announced a customer refund or compensation scheme in this proceeding. Customers should not assume that a payment is available merely because they traded CFDs or lost money.
Case timeline
| Date | Event |
|---|---|
| 2 August 2023 | The original proceeding was lodged in the Federal Court under file NSD 805 of 2023. |
| 3 August 2023 | ASIC publicly announced the lawsuit. |
| 25 September 2023 | ASIC filed an amended originating process and amended concise statement. |
| 12 March 2024 | ASIC filed a statement of claim. |
| 18 April 2024 | ASIC filed a further amended originating process. |
| 20 February 2025 | The Federal Court delivered [2025] FCA 100, concerning suppression and non-publication orders. |
| 7 August 2025 | The Court delivered [2025] FCA 904, allowing eToro to rely on late expert evidence. |
| 27–28 April 2026 | ASIC’s case update listed the hearing to continue on these dates. The previously listed 20–24 October 2025 trial dates had been vacated. |
eToro’s February 2026 Form 20-F stated that the ASIC proceeding remained ongoing. As at 7 August 2026, no final liability finding or penalty was identified in that filing.
What the lawsuit does—and does not—mean for customers
The lawsuit does not mean that ASIC has banned eToro’s CFDs. The filed proceeding seeks declarations, penalties and injunctive or related relief; the lawsuit itself is not a product-intervention order.
It also does not concern all eToro investments. ASIC’s pleaded case is about the retail CFD product and the systems used to determine who should receive it. CFDs can reference crypto-assets, but this is not a general lawsuit about all cryptocurrency transactions or all products available through the eToro group.
Anyone considering CFDs should treat the product’s leverage and loss statistics as material risk information. A customer can lose money even when the underlying asset moves only modestly, particularly where leverage, overnight financing and rapid market movements are involved. Checking whether a firm is licensed is useful, but it does not make a leveraged product suitable or safe.
Separate CFD regulation in Australia
The eToro litigation is separate from ASIC’s sector-wide CFD product-intervention order. That order includes conditions such as leverage limits and restrictions on certain product features and distribution practices.
ASIC says the order is scheduled to expire on 23 May 2027, unless it is remade. In January 2026, ASIC also reported on a review of 52 licensed CFD issuers covering October 2024 to December 2025 and announced nearly $40 million in refunds across the broader sector.
Those industry-review findings should not be treated as findings against eToro unless they are specifically pleaded or proved in this proceeding.
Important corrections to common reports
| Claim | More accurate position |
|---|---|
| ASIC sued eToro in November 2023. | The original filing record shows lodgment on 2 August 2023, followed by ASIC’s public announcement on 3 August 2023. |
| The Court found that eToro broke the law. | The reported decisions so far were interlocutory and did not determine the substantive allegations. |
| ASIC sued eToro USA. | The defendant is eToro AUS Capital Limited. |
| The case is about crypto trading generally. | The pleaded product is a CFD product, which may reference crypto-assets but is not the same as all cryptocurrency activity. |
| ASIC banned eToro CFDs. | The proceeding seeks court orders; do not describe the CFDs as banned unless a later order establishes that outcome. |
| Almost 20,000 customers were defrauded. | ASIC said almost 20,000 clients lost money. That does not itself establish fraud, causation or a legal contravention. |
For the latest position, readers can consult ASIC’s case update and the Federal Court judgments index.
FAQ
Has ASIC won its case against eToro?
Not as at 7 August 2026. The proceeding remains ongoing, and the reported Federal Court decisions have dealt with interlocutory matters rather than final liability.
Are eToro customers entitled to a refund?
ASIC has not announced a refund scheme or compensation order in this proceeding. Customers should not assume they are entitled to payment simply because they lost money trading CFDs.
Was eToro banned from offering CFDs?
No such conclusion should be drawn from the lawsuit itself. ASIC is seeking declarations, penalties and other orders. A separate ASIC product-intervention regime applies to CFDs across the sector.
What is a CFD?
A contract for difference is a leveraged derivative that lets a customer speculate on price movements in an underlying asset without buying that asset. Leverage can increase both gains and losses.
Free tools Windows power users keep installed
One-click scans. No signup required.
Which eToro company is being sued?
The defendant is eToro AUS Capital Limited, ACN 612 791 803, in Federal Court file NSD 805 of 2023.
The Bottom Line
Bottom line: ASIC alleges that eToro’s Australian CFD target market and customer-screening process were not robust enough for a high-risk leveraged product. The case remains unresolved. There has been no final Court finding, no announced eToro customer-compensation scheme and no basis for describing the lawsuit as a general ban on eToro, crypto trading or CFDs.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
