Denmark’s financial watchdog ordered Saxo Bank to dispose of its own holdings of cryptoassets, saying banks aren’t allowed to conduct proprietary trading under current regulations.
(Bloomberg) — Denmark’s financial watchdog ordered Saxo Bank to dispose of its own holdings of cryptoassets, saying banks aren’t allowed to conduct proprietary trading under current regulations.
Saxo Bank, which has a platform for customers to trade crypto, also holds its own cryptoassets as a hedge against market risk. Such trading isn’t on the list of legal business activities for financial institutions in Denmark, the Danish Financial Supervisory Authority said in a statement Wednesday.
The closely held, Copenhagen-based bank is under heightened regulatory scrutiny after being named for the first time as a systemically important financial institution last month.
Saxo Bank will read the FSA decision “thoroughly to consider how we will deal with this,” Lasse Lilholt, a spokesperson for the bank, said in an email.
Because Saxo has a “very limited” holding of cryptoassets, “the FSA’s decision will have a very small impact on our business, and our customers will not experience any significant changes,” Lilholt said.
New rules around crypto markets will only take full effect from end-2024, so the area “remains unregulated for the time being,” the FSA said. “Unregulated trading in cryptoassets can create distrust in the financial system, and the Danish FSA believes it would be unfounded to legitimize trading in cryptoassets.”
(Updates to add comment from Saxo Bank)
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