Denmark’s FSA orders Saxo Bank to dump Crypto Holdings

Denmark’s financial market supervisor demanded that Saxo Bank dump its cryptocurrency holdings. The Danish Financial Supervisory Authority (FSA) stated this in A declaration released today (Wednesday), noting that the multi-asset broker’s trading of digital assets for its own accounts does not fall within the “legal scope of business” of investment banking.

As a bank specializing in online trade and investment, Saxo Bank offers a wide range of financial products and services, including online trading of stocks, bonds, commodities, currencies, contracts difference, fiat currencies and cryptocurrencies.

According to the FSA, the Copenhagen-based investment bank hedges its crypto assets to match the market risk associated with its digital asset products. However, the regulator noted that crypto trading is not among the supported activities listed in Annex 1 of the Danish Financial Companies Act.

“Unregulated trading in crypto assets can create mistrust in the financial system, and the Danish FSA believes that legitimizing trading in crypto assets would be unwarranted,” the financial watchdog explained. “Thus, the activity cannot be admitted as an ancillary banking activity for reasons of financial stability, cf. Article 24 of the Danish Financial Companies Act.

In addition, the regulator pointed out that because the European Union recently passed The crypto regulation, Markets in Crypto-Assets (MiCA), will not come into effect in full until December 30, 2024, with crypto trading between financial institutions “remaining unregulated at this time.”

Saxo Bank did not immediately respond to The finance tycoonsrequest for comment.

Denmark’s financial market supervisor demanded that Saxo Bank dump its cryptocurrency holdings. The Danish Financial Supervisory Authority (FSA) stated this in A declaration released today (Wednesday), noting that the multi-asset broker’s trading of digital assets for its own accounts does not fall within the “legal scope of business” of investment banking.

As a bank specializing in online trade and investment, Saxo Bank offers a wide range of financial products and services, including online trading of stocks, bonds, commodities, currencies, contracts difference, fiat currencies and cryptocurrencies.

According to the FSA, the Copenhagen-based investment bank hedges its crypto assets to match the market risk associated with its digital asset products. However, the regulator noted that crypto trading is not among the supported activities listed in Annex 1 of the Danish Financial Companies Act.

“Unregulated trading in crypto assets can create mistrust in the financial system, and the Danish FSA believes that legitimizing trading in crypto assets would be unwarranted,” the financial watchdog explained. “Thus, the activity cannot be admitted as an ancillary banking activity for reasons of financial stability, cf. Article 24 of the Danish Financial Companies Act.

In addition, the regulator pointed out that because the European Union recently passed The crypto regulation, Markets in Crypto-Assets (MiCA), will not come into effect in full until December 30, 2024, with crypto trading between financial institutions “remaining unregulated at this time.”

Saxo Bank did not immediately respond to The finance tycoonsrequest for comment.