Is Etoro Safe?
The crypto world is full of cryptocurrency exchanges and brokerage platforms to choose from, causing plenty of headaches to traders who want to make the right risk-free choice.
One of the first things you should be paying attention to when looking for an exchange is the level of security provided by the platform and its cybersecurity team. Is this exchange reliable and licensed? What are its verification methods and does it perform KYC checks? How does it store customer funds, etc?
Our team asked these same questions when researching eToro, a trustworthy international exchange platform. Today, we’re sharing the answers with you.
The story of eToro began two years before the emergence of Bitcoin. In 2007, eToro was launched as an online trading platform for stocks and CFD. As the crypto industry started to gain traction among traders worldwide, eToro was quick to add cryptocurrency trading to its list of options.
On eToro you can trade with some of the most popular digital coins including Bitcoin, Ethereum, and Litecoin. One of the advantages of using this exchange is the lack of deposit and other trading fees, except for spreads.
One of eToro’s main objectives is to raise the level of financial literacy. You don’t have to be an experienced trader to understand and use eToro’s trading options. For newbies and retail traders, eToro offers a pleiad of courses and educational material that can be your perfect starting point in the crypto world.
On top of that, as a new user, you’re entitled to a virtual-money account with a balance of $100,000. Although you can’t actually spend this money, you can use them to get a taste of what trading cryptocurrencies looks like, before you feel comfortable enough to invest your own funds.
The rest of our guide dives deep into the high-level security measures provided by eToro. If you want to know more about the exchange’s features, you’re welcome to check out our in-depth eToro Review.
How to Secure Your Account With Etoro
Etoro has been in the crypto business for over a decade. During that time, the platform has built a solid reputation as a reliable exchange, fully-compliant with financial regulations.
Etoro is regulated by a number of authoritative regulators such as FCA (Financial Conduct Authority of the U.K.), ESMA (European Securities and Markets Authority), ASIC (Australian Securities and Investments Commission), and CySEC (Cyprus Securities & Exchange Commission).
Because of that, users should rest assured that their money is in good hands.
Know Your Customer (KYC) Check
Because eToro has obtained a license from a number of financial regulators, the platform is obliged to meet their anti-money laundering policies in order not to tarnish its reputation. One of these requirements is the KYC check, included as a final step of the registration process.
The test asks you to upload a scanned copy of your government-issued ID. This can be your national ID card, your passport, or driving license, as long as they’re not expired. Next, you need a recent proof of address (e.g. a bank statement or utility bill).
The exchange might need a day or two to verify your application. You can’t start trading without this approval.
The first security measure that comes to mind when talking about crypto exchanges is the two-factor authentication or 2FA for short. Once activated, this feature includes two factors or locks that you need to verify each time you try to log into your account.
The 2FA is an optional but highly recommended security measure that adds another layer of protection together with your password. It’s a verification code that eToro sends to the mobile device you’ve linked to your account.
However, the truth is that phones aren’t the most reliable devices because hackers might spoof your phone number and gain access to the code. Hopefully, eToro will add Google Authenticator in the future, which generates one-time passwords to authenticate users on different platforms.
On eToro, all transactions are communicated using Secure Socket Layer (SSL) technology. It’s a method that encrypts your data and makes sure no one can read your message or change it. Besides encrypting it, SSL signs the data as well.
Both processes require the use of a public and private key. To encrypt the data you need a public key, but to decrypt it, you need the private key.
We can conclude that eToro adheres to all jurisdictional laws and financial regulations, especially when it comes to respecting the anti-money laundering policy, terrorist financing, and data protection.
It goes the extra mile to separate company from customer funds and safeguards them in bank accounts with tier-one financial institutions across the world.
Our only remark is in reaction to the platform’s account security which could benefit from additional security layers such as Google Authentication, for example. On the other hand, eToro is led by a stellar team of cybersecurity experts that won’t let customers down in times of need.
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Disclaimer: Digital currencies and cryptocurrencies are volatile and can involve a lot of risk. Their prices and performance is very unpredictable and past performance is no guarantee of future performance. Consult a financial advisor or obtain your own advice independent of this site before relying and acting on the information provided.