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The Danish Financial Supervisory Authority explained that it was not legal for banks to carry out such activity. For reasons of financial stability and within the framework of current regulations, these banking activities around crypto-currencies will have to be stopped.
Saxo Bank must stop its activities around crypto-assets
The Danish bank Saxo has been ordered by the Danish financial regulator to dispose of its holdings in cryptocurrencies. The Danish Market Authority announced this new measure on Wednesday 5 July.
The Danish Financial Supervisory Authority (FSA) explained that it was not legal for banks to conduct such activities. These auxiliary banking activities will have to be stopped for reasons of financial stability and within the framework of the current regulations of the country. According to the press release:
The trading of crypto-assets by Saxo Bank A/S for its own account took place in order to hedge the risks associated with offering other financial products. However, this does not change the fact that the activity, in itself, is not permitted for Danish financial institutions.
Danish regulator orders Saxo Bank to dispose of its own holdings of cryptoassets, saying banks aren’t allowed to conduct proprietary trading under current regulations https://t.co/eT7njPPXYn
— Bloomberg Crypto (@crypto) July 5, 2023
Danish authorities support MiCA legislation
L’Danish financial watchdog also justified these actions and its regulation. For her, given that the European Union regulations do not come into force until December 30, 2024, the activity of Saxo Bank is not currently regulated. Known as the regulation of crypto-asset markets, MiCA will only come into force from December 30, 2024. According to the FSA report:
Unregulated crypto-asset trading can create mistrust in the financial system, and the Danish FSA considers it would be unfounded to legitimize crypto-asset trading.
In a statement, the Sax Bank said :
We naturally take into account the decision of the Financial Supervisory Authority and will read it carefully to consider how we respond appropriately. In this regard, we have held a very limited portfolio of cryptocurrencies, only to cover a very marginal proportion of the risk associated with the development and simplification of crypto-assets for retail clients.
The vast majority of this exposure is mitigated by exchange-traded and well-cleared products. Therefore, the FSA’s decision will have a very limited impact on our business and our customers will not experience any significant changes.
Source : CoinDesk, FSA document
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