Denmark regulator asks Saxo Bank to dispose of its crypto holdings
- Since MICA doesn’t come into effect until December 2024, crypto activity would be unregulated for the time being.
- Similar to other jurisdictions, Danish authorities were also dealing with crypto-related activities on a case-by-case basis.
The Danish Financial Supervisory Authority (DFSA) has ordered Saxo Bank to dispose of its crypto holdings.
The DFSA released a statement on 4 July, condemning Saxo Bank’s crypto activities. The Danish regulator added that under current rules, it was not legal for banking institutions to perform crypto trading as an additional bank activity for concerns of financial stability.
The statement read as follows,
“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 DFSA claimed that Saxo Bank allows its customers to trade a variety of crypto products on its platform. The company also provides a number of crypto-linked exchange-traded funds and exchange-traded notes. The DFSA order does not require Saxo Bank to discontinue its crypto offerings.
The regulator also reasoned that since the European Union’s crypto regulation, known as Markets for Crypto Assets Regulation (MiCA), does not come into effect until December 2024, the activity is unregulated for the time being.
Saxo Bank released a statement in response, claiming that it will oblige by the DFSA’s order. It also said that it had a very limited portfolio of cryptocurrencies, solely to hedge a marginal proportion of risk associated with the facilitation of crypto assets. Therefore, the FSA’s directive has minimal impact on its customers.
How Denmark is regulating crypto
Like a lot of countries, the authorities in Denmark are also dealing with crypto-related activities on a case-by-case basis.
In April, the DFSA granted permission to a local crypto firm Januar to operate in 30 European Economic Area markets.
In March, the Supreme Court of Denmark passed two rulings regarding the status of Bitcoin [BTC] as a taxable asset. It ruled in the first case that a party gaining profits from selling Bitcoin acquired through several purchases and donations needs to report the sale as a taxable event.
In the second case, it ruled that a user who mined their own Bitcoin and later sold the coins would be subject to the same tax norms.