eToro announces termination of SPAC deal amid “circumstances”

Rick Steves

“We ended Q2 2022 with approximately 2.7 million funded accounts, an increase of over 12% versus the end of 2021, demonstrating continued customer acquisition and retention rates that have been improving over time. We remain confident in our long-term growth strategy and excited for the future of eToro.”

eToro Group Ltd has parted ways with SPAC company FinTech Acquisition Corp. V as the firms agreed to terminate their plan of merger as the deadline expired on June 30.

The firms announced that neither party will be required to pay the other a termination fee as a result of the mutual decision to terminate the Merger Agreement which was initially announced in March 2021.

Transaction rendered impracticable due to circumstances

eToro abandoned its plans to go public even after it lowered its SPAC valuation down to $8.8 billion from the earlier planned $10.4 billion, as market conditions changed and SPACs face more headwind.

Betsy Cohen, Chairman of FinTech V commented: “eToro continues to be the leading global social investment platform, with a proven track record of growth and strong momentum. Although we are disappointed that the transaction has been rendered impracticable due to circumstances outside of either party’s control, we wish Yoni and his talented team continued success.”

Yoni Assia, Co-founder and CEO of eToro commented: “We would like to thank Betsy and the entire FinTech V team for their hard work, diligence and support throughout this process. While this may not be the outcome that we hoped for when we started this process, eToro’s underlying business remains healthy, our balance sheet is strong and will continue to balance future growth with profitability. We ended Q2 2022 with approximately 2.7 million funded accounts, an increase of over 12% versus the end of 2021, demonstrating continued customer acquisition and retention rates that have been improving over time. We remain confident in our long-term growth strategy and excited for the future of eToro.”

eToro is now reportedly in talks to close a private funding round of roughly $1 billion, at a $5-6 billion valuation.

eToro obtains crypto license in France

In the meantime, the broker continues to expand operations across the globe, having just recently obtained a license that allows it to offer regulated services under legislation governing operations of digital asset service providers (DASPs), namely France’s PACTE law, one of the first crypto legislative packages passed in Europe.

The dual regulatory structure in France includes the Autorité des Marchés Financiers (AMF) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR). The license covers many aspects of all crypto-active players.

The broker will also have to comply with the MiCA rules that sets a common framework across all 27 member states of the European Union. The European Securities and Markets Authority (ESMA) will be given powers to step in to ban or restrict crypto platforms if they are seen to not properly protect investors, or threaten market integrity or financial stability.

The new framework aims to reduce anonymity to tackle money laundering and evasion of sanctions as the Ukraine-Russia conflict rages on. Transfers between exchanges and so-called “un-hosted wallets” owned by individuals will need to be reported if the amount tops the 1,000-euro threshold, a contentious issue for crypto enthusiasts who often trade digital currencies for privacy reasons.

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