The Danish Financial Supervisory Authority (FSA) has ordered Saxo Bank to dispose of its crypto assets, citing regulations that prohibit such trading for financial institutions in Denmark.
Saxo Bank, a leading online trading and investment platform based in Denmark, has been instructed by the country’s financial regulator to liquidate its holdings of crypto assets, including Bitcoin (BTC) and Ether (ETH).
The FSA said in a statement on Wednesday that Saxo Bank’s trading in crypto assets for its own account is not legal as an ancillary bank business due to financial stability concerns.
According to the FSA, Saxo Bank has been holding its own crypto assets as a hedge against market risk in connection with offering other financial products.
The regulator, however, said this activity is off-limits for Danish financial institutions.
The FSA also pointed out that the European Union’s crypto regulation, known as Markets in Crypto-Assets Regulation (MiCA), will only come into effect from December 30, 2024.
Until then, the trading of crypto assets remains unregulated and can create distrust in the financial system.
“Unregulated trading in crypto-assets can create distrust in the financial system, and the Danish FSA considers that it would be unfounded to legitimize trading in crypto-assets,” the statement said.
Saxo Bank did not immediately respond to CoinDesk’s request for comment. However, in a statement to Bloomberg, the bank said it would consider the FSA’s decision and how to respond to it.
“We naturally take the decision of the Financial Supervisory Authority into account and will read it thoroughly to consider how we otherwise respond to it. With regards to this, we have held a very limited portfolio of cryptocurrencies, solely to hedge a very marginal proportion of risk associated with the facilitation of crypto assets”.
Saxo Bank
About Saxo Bank
Saxo Bank is a leading online trading and investment platform that provides access to global markets and a range of asset classes, including stocks, bonds, forex, commodities, derivatives, and crypto assets.
The bank was founded in 1992 and has over 2 million clients in 170 countries. It also provides white-label solutions to other financial institutions.
Saxo Bank has been offering crypto trading services since 2018 when it launched Bitcoin and Ether trackers that allow clients to gain exposure to the price movements of these cryptocurrencies without owning or storing them.
The bank also added support for Bitcoin futures contracts from CME Group in 2019.
The FSA named Saxo Bank as one of Denmark’s systemically important financial institutions (SIFIs) for the first time last month. This means that the bank is subject to stricter capital requirements and regulatory oversight.
