The Danish Financial Supervisory Authority (FSA) has ordered Saxo Bank, a Copenhagen-based multi-asset broker, to divest its cryptocurrency holdings.
Proprietary bank trading of crypto assets found to be “outside legal trading area of financial institutions”, regulator fixed.
“Unregulated trading in crypto assets can lead to mistrust in the financial system, and the Danish FSA considers that legitimizing trading in crypto assets would be groundless.”
Online trading and investment company Saxo Bank launched a cryptocurrency offering in May 2021 that allows customers to trade Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC) against EUR, USD and JPY from a single account. margin without the need to maintain a crypto wallet. In addition, Saxo already offers several cryptocurrency products, including ETNs and ETFs.
However, the regulatory body, after careful evaluation, concluded that digital asset trading does not appear in Schedule 1 of the Financial Business Law.
Saxo Bank has “limited” cryptocurrency holdings and the FSA orders will have “very little impact” on the bank, Lasse Lilholt, a spokesperson for Saxo Bank, told Bloomberg.
Saxo will review the FSA’s decision “in depth to consider how we will address this.”
The financial watchdog said that the European Union’s crypto regulation, markets for crypto assets (MiCA), will take effect from December 30, 2024 and participation in crypto trading will remain unregulated until then.
Denmark Crypto Status
The Danish financial regulator stipulates that cryptocurrencies used for payments are normally not regulated. However, the laws apply to ICOs, depending on their characteristics.
For example, to determine if an ICO is subject to financial regulation, you need to show that the token gives investors voting or decision-making rights over the company’s earnings.
This is because the FSA is not authorized to regulate tokens that provide such features.
As a member of the European Union, Denmark actively fights against money laundering. The EU’s anti-money laundering (AML) regulations are technologically neutral, and cryptocurrencies are also included in them.
