Regulators in Denmark are taking a firm stance against cryptocurrency trading within the country, emphasizing that it is not welcomed by investors.
The Danish Financial Supervisory Authority (DFSA) has issued an order to Saxo Bank, an investment bank based in Copenhagen, mandating the disposal of its crypto holdings.
According to a report from CoinDesk, Saxo Bank has been trading cryptocurrencies for its own account as a means to hedge risks associated with offering other financial products.
The DFSA has highlighted that trading crypto assets falls outside the scope of the conditions outlined in the Financial Business Act. Consequently, any direct or related activities in this domain are considered to be outside the legal purview of financial institutions in Denmark.
In a separate report from CoinTelegraph, the regulator stated, "Based on the above, Saxo Bank's trading in crypto assets for its own account is found to be outside the legal business area of financial institutions. On this basis, Saxo Bank is ordered to dispose of its own holdings of crypto assets."
It is worth noting that Denmark will fall under the proposed Markets in Crypto Assets (MiCA) regulation in the European Union. This upcoming framework aims to establish a comprehensive regulatory framework covering cryptocurrencies and related sectors, ensuring increased transparency and compliance among digital asset players.
MiCA is expected to come into effect in 2024. However, in the interim, the Danish Financial Supervisory Authority has clarified that crypto trading activities will be deemed "unregulated."
In response to the regulatory decision, Saxo Bank has acknowledged the local regulators' directive and stated that it will base its response on the order. The investment bank emphasized that its cryptocurrency portfolio is very limited and the recent developments will have minimal impact on its overall operations.
On June 29, Finance Magnates reported that Saxo Bank has sold its stakes in Saxo FinTech to Geely Holding Group. Once approved by regulators, this move will make the Chinese automotive giant the sole owner of the venture, with the shares previously evenly split between the two companies.
This development indicates that Saxo Bank may be distancing itself from decentralized finance and related activities.
As regulatory scrutiny continues to evolve globally, analysts are in a wait-and-see stance on how financial institutions and cryptocurrency-related businesses will navigate the shifting landscape in Denmark and beyond.
