Denmark is making significant waves in the crypto arena. The country’s financial regulatory authority has directed Saxo Bank to sell off its crypto holdings. This action comes in response to current regulations that forbid banks from participating in proprietary trading. It has further prompted the regulatory authority to intervene.
Earlier today, the Danish financial supervisory authority released a statement. According to them, Saxo Bank held its own digital assets as a protective measure against market risks. The regulatory body stressed that conducting such trading activities is outside the scope of authorized business operations for financial institutions in Denmark. Saxo Bank actively offers a forum for customers to take part in crypto trading. The statement further read,
“Saxo Bank A/S’ trading in crypto assets for its own account has taken place in order to cover risks in connection with the offering of other financial products. However, this does not change the fact that the activity, in itself, is not permitted for Danish financial institutions. This is in accordance with § 7, subsection 1, in the Financial Business Act.”
Is Denmark overlooking MiCA?
Not really. The financial regulatory authority noted that the activity remained unregulated at present. This is because the European Union’s crypto regulation, known as the Markets in Crypto Assets Regulation [MiCA], is scheduled to take effect only from Dec. 30, 2024. The statement said,
“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 activity is therefore also not found to be acceptable as an ancillary bank business for reasons of financial stability. According to cf. section 24 of the Financial Business Act.”
More recently, the Denmark Supreme Court has ruled to impose a tax on profits derived from Bitcoin. Investors and miners who make profits through the sale of Bitcoin will have to comply with taxation regulations in the region. Similar to its other nations, Denmark seems to be keeping an eye on the industry.