Australian ASIC filed a lawsuit against eToro CFD products, the latter responded: the target market determination has been revised, and the service has not been affected

Odaily Planet Daily News The Australian Securities and Investments Commission (ASIC) filed a lawsuit against the multi-asset investment platform eToro’s contract for difference (CFD) products provided to retail investors on the grounds that its market positioning is too broad and violates design and distribution rules. ASIC said: "The CFDs offered by eToro are high-risk and volatile, and the platform's target market screening test did not correctly exclude unsuitable customers from trading the product; between October 5, 2021 and June 14, 2023, Nearly 20,000 clients of eToro lost money trading CFDs." It is reported that a contract for difference is a leveraged derivatives contract that allows buyers to speculate on the price movement of an underlying asset, such as a foreign exchange rate, a stock market index, a single stock, a commodity or a cryptocurrency. eToro’s cryptocurrency CFDs allow up to two times leverage on certain assets, and others on stocks, currencies, commodities and precious metals. An eToro spokesperson said the company has since revised its determination of the target market for CFDs. "These procedures cover the period from October 5, 2021 to July 29, 2023. eToro AUS is currently operating in accordance with the revised target market determination for CFDs," the spokesperson said. eToro added that its services have not been affected or disrupted and that ASIC's allegations are currently being considered and will respond accordingly. (Cointelegraph)