The Danish Financial Supervisory Authority (FSA) has ordered investment bank Saxo to divest its cryptocurrency holdings as financial institutions in the country are prohibited from conducting crypto trading activities, according to a July 5 statement.
“On July 4, 2023, the Danish Financial Supervisory Authority has decided that Saxo Bank A/S’s proprietary trading of crypto assets falls outside the legal business area of financial institutions, including Article 24 of the Financial Business Act. .”
FSA noted that while Saxo’s crypto holding company was used to hedge the market risks associated with its crypto-related products, the Financial Business Act does not include cryptocurrency trading as a legal area of business for financial institutions.
“Saxo Bank A/S trades crypto-assets on its own account to hedge risks associated with offering other financial products. However, this does not alter the fact that the activity in itself is not permitted for Danish financial institutions in accordance with § 7 para 1, in the Financial Business Act.”
According to the authorities, the bank’s “unregulated trading of crypto assets may create mistrust in the financial system, and the Danish FSA believes that it would be unfounded to legitimize the trading of crypto assets.”
FSA further noted that pending implementation of the European Union’s Markets in Crypto Assets (MiCA) regulation in December 2024, crypto trading activities will remain “unregulated” for now.
MiCA is a groundbreaking crypto law passed unanimously by the European Union on May 16, designed to provide a regulatory framework for crypto assets to ensure European financial stability and consumer protection.
Meanwhile, in line with tightening regulations in Denmark, the country has introduced a crypto profit tax in its jurisdiction. The country’s Supreme Court ruled that profits from Bitcoin (BTC) sales in March are taxable in two cases.
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