When choosing any forex broker, your key concern as a trader first and foremost should always be around safety and security. This is natural and checking up on the background and history of even a top forex broker is actually a positive thing you should do.
We managed to cover all aspects of eToro and what they are all about with our in-depth eToro Review. This is definitely something to check out before trading with them.
Here though we will focus on taking a closer look at the safety and security you can expect to find as a trader. Is eToro safe? Let’s find out!
Table of contents
Is eToro safe?
As a trader, your primary focus when choosing a broker is that of security and safe trading. A natural first question you will ask when looking at this broker then would be, is eToro safe?
eToro is considered a safe broker. They are well-regulated by 4 of the most respected regulatory bodies in the financial world: CySEC, FCA, ASIC, SEC. This top-tier regulation provides an extremely safe trading environment for the millions of traders who use eToro and it means that funds are fully protected at all times when trading with the broker.
eToro (Europe) Ltd, is regulated by CySEC (109/10), eToro (UK) Ltd, is authorized and regulated by the FCA (583263), eToro AUS Capital Pty Ltd. is authorized and regulated by the ASIC (491139) while eToro USA LLC, is registered with FinCEN as a Money Services Business and is regulated by the SEC.
Negative Balance Protection
Segregated Client Funds
Data and privacy protection
What happens if eToro goes bankrupt?
Since the broker operates with your funds in a segregated bank account, you will have nothing to worry about.
This means they cannot directly access your funds or use them to repay any of their own debts. Only you control the deposit and withdrawal of these funds from your account.
Problems you may encounter with eToro
Of course, even though eToro is one of the best social trading forex brokers in the industry and is backed by a very trusted reputation around, there are still some problems that you may bump into along the way.
Two main issues seem to be raised more commonly than others by some people online. Here we will address these and possible reasons why these concerns are brought up by other users.
When it comes to making eToro withdrawals you may find some users and reviews complaining that they can’t make withdrawals. “I can’t withdraw my funds” is sometimes a common eToro complaint. Far from being an eToro scam, this actually happens for the following reason:
You do not need to complete eToro verification to deposit funds. This is actually a great positive point as it means you can trade straight away. When making a withdrawal though, you will have to verify your eToro account first. In fact, it is an easy process that can be quickly completed with just a couple of documents and once you have done this, your withdrawals are typically processed and available within a couple of days.
If you want to completely avoid this being an issue, you can simply verify your eToro account right away before you make any kind of first eToro deposit. About this, it may be useful for you to read our eToro Account verification tutorial, where we explain the process verification in detail.
Another issue that some new users may have with eToro is around conversion fees. This may result in a comment or eToro complaint something like “eToro stole my money”. In fact, again this is not the case.
What has actually happened here is that the trader has deposited a certain amount of money and then seen that a certain small percentage appears to be missing from what they have deposited. This causes them to be angry but what has likely happened is they have been charged a currency conversion fee on their deposit.
Since eToro only offers USD accounts, you will be charged a small conversion fee if you deposit in any other currency. This is completely normal and eToro does not earn anything from this fee. It is actually charged by your payment method and they are just covering the costs.
As we mentioned, eToro is one of the top brokers in the entire industry and fully backed by a very respected reputation. This comes from many years in the industry first of all. They were founded back in 2007 in Israel and were one of the pioneers of social and copy trading.
This has continued as they have grown over the years and they have added more and more features to their offering. They have now expanded to such a level that they cater to millions of traders around the world and have multiple office locations to match. You will find eToro offices in London, Cyprus, Australia (Sydney), the US (New Jersey), and even China (Shanghai). They truly are a global operation.
Being a global operation, they also have global regulation in place to match. This comes from some of the top regulators in the sector including ASIC in Australia, CySEC in Europe, the SEC in the United States of America, and the FCA in the UK.
If you want to find more about the safety and regulations of eToro, we have written a guide ‘is eToro regulated?’, which you should totally check out.
Funds Protection with eToro
As with all top forex brokers, you can expect the very best in terms of funds protection from eToro. This is delivered in a number of ways through the segregation of funds within top-tier banks and financial institutions. This means the broker cannot directly access your funds to cover any financial issues they may have. Negative balance protection is also offered as standard. These features are both guaranteed and required by CySEC and most other top regulators.
In the US though this isn’t needed, since eToro does not offer leveraged products making it impossible to lose more than what you’ve invested. Read our eToro USA review for US citizens to know more.
When it comes to banking and storing your funds eToro uses Coutts Bank. This is part of the NatWest Holdings group which belongs to the 3rd largest bank in the UK, the Royal Bank of Scotland (RBS). Overall they are hugely respected and extremely secure, being listed on the London Stock Exchange, operating for almost 300 years, and being valued at tens of billions of dollars.
If that was not enough, in the unlikely event something does go wrong, you will be covered by a compensation fund which pays out between $20,000 and £85,000 for EU and UK customers
Data Protection with eToro
Another huge area that you need to understand is how eToro protects your data. This is becoming increasingly important in the world today.
For regulatory reasons and to help fight against money laundering eToro is required to collect some of your personal data. As they are a financial service, just like a bank or other financial institution, they may also collect data like your location, log information, the ID of your device, and on-site activity, including the eToro wallet activity. This is all with the aim to improve the security of the service and your funds.
Importantly this information is kept completely secure and is not shared with anyone besides these few exceptions:
Within the eToro group
With your financial institutions and eToro collaborators
If a legal case arises and authorities request such data
It is also very important that you are safe and secure when using the eToro trading platform. To this end, the broker provides for completely encrypted communication between you and their servers as well as offering a secure two-step login process.
Support in case of emergency
If you do find yourself in a difficult situation and in need of support, then eToro certainly has your back. They offer dedicated support through email, phone, and fast web-based live chat if you need a quick answer.
If you prefer to phone then you can do so or you can also ask for a call back from a member of the support team. Language is also not an issue since the eToro support team caters to more than 10 languages for their traders around the world.
eToro Safety and Trading
Finally, when you are actually trading, there are more safety measures in place to make sure you have the best but also the most secure and transparent trading experience possible at eToro.
When it comes to executing your trades, many brokers including eToro no longer use only one execution model. What you will typically find is a mix that depends on a number of factors including the assets, if you are trading CFDs or not, if you are trading cryptocurrencies, if you’re copying a popular investor, and so on.
eToro is a market maker broker with STP/NDD characteristics. This means that they have great flexibility and efficiency to provide you with the best, most secure trading services but also offer the best possible prices. A great combination for you as a trader. If you want more info about these kinds of brokers, here’s the perfect post for you: our best ECN/STP forex brokers top ten.
Trading tools for safety
As well as protecting your funds very well from their side, the broker also provides a number of tools to help you manage the safety of your own funds when trading. This includes the ability to set stop losses and take profits on your trades as well as a trailing stop. These are all designed to help you safely enter and exit trades at your desired levels though there is no guaranteed stop-loss which would be useful when the markets are very volatile.
Still, there is an ample number of trading tools and features available from eToro to help keep your funds safe from both sides when trading. These trading tools are very important to limit your risk, that’s why eToro offers every trader a free unlimited demo account, so you can practice directly on their social trading platform or on their mobile app.
Is eToro safe FAQ
Is eToro trustworthy?
Yes. eToro is one of most famous broker in the industry and they’re regulated by top body regulators, such as FCA, ASIC, SEC and CySEC
Is my money safe with eToro?
Yes. Other than being regulated by top regulators, clients’ funds are kept secure in top-tier banks and all of their personal information is guarded under SSL encryption. 2FA is also available.
Filippo is the co-founder and CEO of InvestinGoal.com. He has 15 years of experience in the financial sector and forex in particular. He started his career as a forex trader in 2005 and then became interested in the whole fintech and crypto sector.
Over this time, he has developed an almost scientific approach to the analysis of brokers, their services, and offerings. In addition, he is an expert in Compliance and Security Policies for consumers protection in this sector.
With InvestinGoal, Filippo’s goal is to bring as much clarity as possible to help users navigate the world of online trading, forex, and cryptocurrencies.
Trading CFDs, FX, and cryptocurrencies involves a high degree of risk. All providers have a percentage of retail investor accounts that lose money when trading CFDs with their company. You should consider whether you can afford to take the high risk of losing your money and whether you understand how CFDs, FX, and cryptocurrencies work. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Your capital is at risk. The present page is intended for teaching purposes only. It shall not be intended as operational advice for investments, nor as an invitation to public savings raising. Any real or simulated result shall represent no warranty as to possible future performances. The speculative activity in forex market, as well as in other markets, implies considerable economic risks; anyone who carries out speculative activity does it on its own responsibility.
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