Denmark’s financial regulator has ordered Danish bank Saxo to sell its own cryptocurrency holdings, the body announced recently. According to the Danish Financial Supervisory Authority (FSA), it is not permissible for banks to conduct such activity as supplementary bank business for reasons of financial stability under existing legislation.
“Saxo Bank A/S has traded in crypto assets for its own account in order to cover risks associated with the offering of other financial products,” the statement read. “However, this does not change the fact that the activity is not permitted for Danish financial institutions in and of itself ”
The financial watchdog also stated that because the European Union’s crypto law, known as markets for cryptoassets regulation (MiCA), does not go into effect until December 30, 2024, the activity is now unregulated.
“Unregulated trading in crypto-assets can create distrust in the financial system, and the Danish FSA believes that legitimising trading in crypto-assets would be unfounded,” according to the statement.
“We naturally take the Financial Supervisory Authority’s decision into account and will carefully read it before deciding how to respond.” In this context, we have retained a very modest portfolio of cryptocurrencies, simply to hedge a very minor amount of the risk connected with the facilitation of crypto assets,” Saxo bank stated in a statement.
“The vast majority of this risk is mitigated by using exchange-traded and cleared products.” As a result, the FSA’s decision will have only a minor impact on our business, and our clients will see no significant changes,” the statement continued.