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Danish bank Saxo has been ordered by the Danish financial regulator to dump its own crypto holdings, the authority announced on Wednesday.
The Danish Financial Supervisory Authority (FSA) explained that it is not legal for banks to carry out ancillary banking activity for financial stability reasons under current regulations.
“The trading of crypto assets by Saxo Bank A/S on its own account has taken place in order to hedge the risks of offering other financial products,” the statement read. “However, this does not change the fact that the activity, per se, is not permitted for Danish financial institutions…”
The financial watchdog also said that since the European Union’s crypto regulation, known as the Regulation of Crypto-Asset Markets (MiCA), does not come into effect until December 30, 2024, the activity is not regulated at the moment.
“Unregulated trading in crypto-assets can create mistrust in the financial system, and the Danish FSA considers it would be unfounded to legitimize trading in crypto-assets,” the statement said.
Saxo Bank did not immediately respond to CoinDesk’s request for comment.
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