Saxo Bank has been ordered by the Danish financial regulator to sell its cryptocurrency holdings, the agency said on Wednesday.
The Danish Financial Supervisory Authority (FSA) said that current regulations make it illegal for banks to carry out activities such as ancillary banking, citing financial stability.
“Saxo Bank A/S cryptocurrency trading is conducted at its own risk to cover the risks associated with offering other financial products,” the statement said. "However, the fact remains that the activity itself is not permitted for Danish financial institutions..."
The financial regulator also said the activity is currently unregulated as the European Union's cryptocurrency regulation, known as the Crypto Market Regulation (MiCA), does not come into force until December 30, 2024.
“The Danish Financial Authority considers the legalization of cryptotrading to be unfounded, as unregulated trading of digital assets could create mistrust in the financial system,” the statement said. “Clearly, we are considering the financial regulator's decision and will read it carefully and consider how we might otherwise respond. Saxo Bank said in a statement: We have held only a very limited portfolio of cryptocurrencies in order to hedge a very small portion of the risks involved."
“Most of this risk is mitigated by foreign exchange trading and payment products. Therefore, the impact of the FSA's decision on our business will be very limited and we expect our clients to experience significant changes. the statement continued.
Recently, the Danish Supreme Court ruled that profits from Bitcoin should be taxed. Investors and miners profiting from the sale of Bitcoin must follow local tax regulations.
