Denmark’s
financial markets supervisor has demanded that Saxo Bank dump its
cryptocurrency holdings. The Danish Financial Supervisory Authority (FSA)
stated this in a statement released today (Wednesday), noting that the
multi-asset broker’s trading in digital assets for its own accounts falls
outside the investment bank’s “lawful area of activity.”
As a bank that specializes in online trading and investment, Saxo Bank offers
a wide range of financial products and services, including online trading in
stocks, bonds, commodities, forex, contracts for 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 trading in crypto is not part of the supported
activities listed in Appendix 1 of the Danish Financial Business Act.
“Unregulated
trading of crypto assets can create distrust in the financial system, and the
Danish FSA finds that legitimising trading in crypto-assets would be
unjustified,” the financial watchdog explained. “Thus, the activity cannot be
accepted as an ancillary banking activity for reasons of financial stability,
cf. section 24 of the Danish Financial Business Act.”
Furthermore,
the regulator pointed
out that because the European Union’s recently
passed crypto
regulation, Markets in Crypto-Assets (MiCA), will only come into enforcement in
its entirety on December
30, 2024, crypto trading among financial institutions “remains unregulated for
the time being.”
Saxo Bank
did not immediately respond to Finance Magnates’request for comment.
Denmark’s
financial markets supervisor has demanded that Saxo Bank dump its
cryptocurrency holdings. The Danish Financial Supervisory Authority (FSA)
stated this in a statement released today (Wednesday), noting that the
multi-asset broker’s trading in digital assets for its own accounts falls
outside the investment bank’s “lawful area of activity.”
As a bank that specializes in online trading and investment, Saxo Bank offers
a wide range of financial products and services, including online trading in
stocks, bonds, commodities, forex, contracts for 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 trading in crypto is not part of the supported
activities listed in Appendix 1 of the Danish Financial Business Act.
“Unregulated
trading of crypto assets can create distrust in the financial system, and the
Danish FSA finds that legitimising trading in crypto-assets would be
unjustified,” the financial watchdog explained. “Thus, the activity cannot be
accepted as an ancillary banking activity for reasons of financial stability,
cf. section 24 of the Danish Financial Business Act.”
Furthermore,
the regulator pointed
out that because the European Union’s recently
passed crypto
regulation, Markets in Crypto-Assets (MiCA), will only come into enforcement in
its entirety on December
30, 2024, crypto trading among financial institutions “remains unregulated for
the time being.”
Saxo Bank
did not immediately respond to Finance Magnates’request for comment.
