In Europe, the conditions of existence are getting tougher for companies offering services related to cryptocurrencies. Proof of this is made once again with the Saxo bank. It is forced to sell its cryptocurrencies, following a request from the Danish regulator. Why was this decision made and what does it bode for the Danish ecosystem?
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Saxo Bank will no longer be able to offer services related to cryptocurrencies
The Danish Financial Supervisory Authority (FSA) announced the news today. She established that Saxo Bank cannot trade cryptocurrencies for its own account, because this activity does not fall within the framework of the law :
“The trading of crypto assets by Saxo Bank A/S for its own account is outside the legal scope of activity of financial institutions. […] On this basis, Saxo Bank is ordered to divest its own crypto assets.»
The measure targets both cryptocurrencies offered for sale, but also the financial products linked to them, in particular “exchange traded funds” (ETFs). This is notable, as a large number of ETFs have just been authorized in recent weeks.
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Saxo bank forced to get rid of its cryptocurrencies
The measure also aims the bank’s cryptocurrency reserves, which are used to hedge against market risks related to cryptocurrencies. In addition to ceasing to offer its services, the bank must therefore also get rid of its own assets.
This is undoubtedly what is most notable in this decision: the regulator not only prohibits services offered to customers, but the very holding of cryptocurrencies by banks. The press release states it as follows:
“Unregulated crypto-asset trading can create mistrust in the financial system, and the Danish FSA considers that it would be unfounded to legitimize the trading of crypto-assets. The activity is therefore also not considered acceptable as an ancillary banking activity for reasons of financial stability.»
Saxo Bank said in a statement that it would take the time to respond to this injunction from the FSA. It also specifies that its direct exposure to cryptocurrencies is limited:
“We hold a very limited portfolio of cryptocurrencieswhich only serves to hedge against a very marginal proportion of risk associated with trading crypto assets.»
This decision of the FSA can however be considered as a precedent, and as a message sent to other Danish banks. In this territory, financial institutions will not be able – for the moment – to create real bridges with the crypto ecosystem.
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Source: FSA, press release
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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