Denmark’s Financial Supervisory Authority (FSA) ordered investment bank Saxo to divest its cryptocurrency holdings because financial institutions in the country are prohibited from crypto trading activities, according to a July 5 statement.

“On 4 July 2023, the Danish Financial Supervisory Authority decided that Saxo Bank A/S’ trading in crypto assets for its own account is found to lie outside the legal business area of ​​financial institutions, including section 24 of the Financial Business Act.”

FSA noted that while Saxo’s crypto holding 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 business area for financial institutions.

“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 in accordance with § 7, subsection 1, in the Financial Business Act.”

According to the authorities, the bank’s “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.”

FSA further noted that pending the implementation of the European Union’s Markets in Crypto Assets (MiCA) regulations in December 2024, crypto trading activities “remain unregulated” for now.

MiCA is a landmark crypto legislation unanimously passed 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 Denmark’s regulatory tightening, the country introduced a crypto gain tax in its jurisdiction. The country’s Supreme Court ruled that gains from Bitcoin (BTC) sales are taxable in two cases in March.

The post Danish authority orders Saxo bank to divest crypto holdings, citing distrust in financial system appeared first on CryptoSlate.

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Filed under: Bitcoin - @ July 5, 2023 1:10 pm