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- Saxo Bank enables its clients to trade a variety of cryptocurrencies on its platform.
- The regulator indicated that the firm offers numerous crypto-related ETFs and ETNs.
The financial authorities in Denmark are intensifying their scrutiny of cryptocurrency exchanges and payment processors. This follows a prohibition on local banks from holding cryptocurrencies to mitigate trading risks.
Saxo Bank, a financial institution based in Denmark, was officially mandated to divest its crypto assets by the Danish Financial Supervisory Authority (DFSA) on July 4.
The DFSA stated that Saxo Bank’s cryptocurrency operations “fall outside the legal business scope of financial institutions,” as per Article 24 of the Danish Financial Business Act.
Trading for Its Own Account
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The DFSA reports that Saxo Bank permits its clients to trade various cryptocurrencies on its platform. The regulator noted that the firm offers multiple crypto-linked ETFs and ETNs, and that “speculation on crypto assets is possible.”
The market risk associated with the bank’s crypto products is also mitigated by a portfolio of the bank’s own cryptocurrency holdings, according to the DFSA. Trading in crypto-assets does not appear to be outside the legal business scope of financial institutions in Denmark. The regulator made this assertion referencing Annex 1 of the Financial Business Act.
According to the DFSA,
“Based on the above, Saxo Bank’s trading in crypto assets for its own account is determined to be outside the legal business area of financial institutions. Consequently, Saxo Bank is instructed to dispose of its own holdings of crypto assets.”
The regulators have concluded that the Bank’s trading in crypto assets for its own account is not permissible under legal definitions. Furthermore, the MiCA (Markets in Crypto Assets) legislation from Europe was also mentioned in the DFSA’s announcement.
The governing body noted that not all MiCA regulations will take effect until December 2024. According to the authorities, this implies that the sector will remain unregulated for the time being.
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