Danish bank Saxo Bank has been ordered by Denmark’s finance regulator to offload its crypto holdings, explaining that it’s currently illegal until sweeping European Union regulation comes into effect.
The Danish Financial Supervisory Authority (FSA) seems to have pointed out to Saxo Bank that trading crypto to cover risks associated with other financial product offerings “is not permitted,” according to an announcement made by the Danish bank on Wednesday. The release added that until EU crypto regulation known as MiCA comes into effect, crypto trading remains unregulated under Danish law.
“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,” Saxo Bank said.
It’s unclear how much crypto Saxo Bank held. According to a statement, its portfolio was “very limited” and “solely to hedge a very marginal proportion of risk associated with the facilitation of crypto assets,” (via CoinDesk).
“The vast majority of this exposure is mitigated through exchange-traded and cleared products. Therefore, the FSA’s decision will have a very limited impact on our business, and our customers will not experience any significant changes,” Saxo Bank added.