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Denmark orders Saxo Bank to remove its cryptocurrencies

Danish financial regulators oppose cryptocurrency service providers, saying that local banks are not allowed to hold cryptocurrencies to hedge against commercial risks.
On July 4, the Danish Financial Supervisory Authority (DFSA) formally ordered local investment bank Saxo Bank will divest its crypto assets.
Referring to section 24 of the Danish Financial Activities Act, the regulator said that Saxo Bank’s cryptocurrency business “does not fall within the legal business sphere of financial institutions”.
According to the DFSA, Saxo Bank offers its customers the ability to trade a range of cryptocurrencies through its platform.. By adding the ability to “speculate on crypto assets,” the regulator states that the firm also offers a variety of cryptocurrency-related exchange-traded funds and exchange-traded securities.
Additionally, the DFSA wrote that Saxo Bank has its own portfolio of crypto assets, which is held as a hedge to offset the market risk associated with the bank’s crypto products.
Referring to Schedule 1 of the Financial Activities Act, the official said that trading crypto assets does not appear to be within the legal business scope of financial institutions in Denmark. DFSA said:

“Based on the foregoing, Saxo Bank’s own-account trading of crypto assets appears to be outside the legal business of financial institutions. Based on this, Saxo Bank has been ordered to dispose of its holdings in crypto assets”.

In the announcement, the DFSA also mentioned the European regulation on crypto-asset markets known as MiCA. The regulator stressed that the entire MiCA regulation will only come into effect from December 2024. “It is therefore currently an unregulated area”highlights the editor.
Lasse Lilholt, Saxo’s head of global communications, told Cointelegraph that the FSA’s order did not force Saxo Bank to cease its cryptocurrency offerings.
“Of course we take into account the decision of the Financial Supervisory Authority and will carefully consider how to proceed.”indicates the delegate. As Saxo Bank customers, you do not own the underlying cryptocurrency, but you are purchasing a financial product that tracks the price of the asset.

Related: BlackRock Reapplies Bitcoin Spot ETF By Appointing Coinbase As ‘Sharing Oversight’ Partner

The spokesperson also underlined that Saxo Bank has a “very limited portfolio of cryptocurrencies” only to hedge a marginal portion of the risk associated with facilitating crypto holdings. Representative added:

“Most of this exposure is mitigated by exchange-traded and exchanged products. Therefore, the FSA’s decision will have little impact on our business and our clients will not experience any significant changes.”

The DFSA did not immediately respond to Cointelegraph’s request for comment.
It seems that the financial authorities in Denmark have some uncertainty regarding local regulations regarding cryptocurrencies. according to some legal resourcesCryptocurrencies such as Bitcoin (bitcoin) In Denmark they do not fall under any financial services category and therefore do not fall under the jurisdiction of the DFSA..
Despite the uncertainty, DFSA cleared Danish startup Januar will do business in 30 European Economic Area markets as of April 2023. In early March, the Danish Supreme Court ruled gave two sentences Whether a Bitcoin sale can qualify as a paid event under certain conditions.

Translation of Walter Rizzo

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