- Saxo Bank allows its clients to trade several cryptocurrencies on its platform.
- The regulator said that the firm provides many crypto-linked ETFs and ETNs.
Denmark’s financial watchdogs are cracking down on cryptocurrency exchanges and payment processors. This is after they banned local banks from holding cryptocurrencies to protect themselves from trading risks.
Saxo Bank, a Danish financial firm, was formally forced to sell its crypto assets by the Danish Financial Supervisory Authority (DFSA) on July 4.
According to the Danish Financial Supervisory Authority, Saxo Bank’s crypto operation “lies outside of the legal business area of financial institutions,” according to Article 24 of the Danish Financial Business Act.
Trading for Its Own Account
The DFSA reports that Saxo Bank allows its clients to trade several cryptocurrencies on its platform. The regulator said that the company provides many crypto-linked ETFs and ETNs, and that “it is possible to speculate on crypto assets.”
The market risk of the bank’s crypto products is also hedged by a portfolio of the bank’s own cryptocurrency holdings, the DFSA said. Trading in crypto-assets does not seem to fall outside the legal business area of financial institutions in Denmark. The regulator stated the above citing 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 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.”
The regulators have reasoned the Bank trading in crypto assets for its own account is unacceptable as per legal terms. Moreover, the MiCA (Markets in Crypto Assets) legislation from Europe was also highlighted in the DFSA’s declaration.
The governing body remarked that not all MiCA rules would go into force until December 2024. According to the authorities, this means the area will continue to be unregulated for the time being.
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