According to a July 4, 2023 press release from the Danish Financial Supervisory Authority, Denmark’s Saxo Bank has been instructed to liquidate its holdings of cryptocurrency assets. The financial regulator maintains that Saxo Bank’s portfolio of crypto assets falls “outside the legal business area of financial institutions” and is in violation of the country’s Financial Business Act.
Saxo Bank Ordered to Liquidate Its Portfolio of Crypto Assets by Danish Financial Regulator
The Danish financial regulatory authority, tasked with overseeing financial markets in Denmark, has directed Saxo Bank to liquidate its crypto asset portfolio. Saxo Bank, an investment bank established in 1992, specializes in online trading and investment. In 2017, Saxo Bank incorporated crypto assets into its services, enabling trading of digital currencies like BTC, LTC, and ETH.
The bank also offers customers access to crypto exchange-traded products (ETPs), allowing investors to gain exposure to prominent cryptocurrencies. The Danish Financial Supervisory Authority (DFSA) asserts that Saxo Bank, in addition to offering crypto services, maintains “a portfolio of crypto assets, which are held as a hedge to offset the market risk associated with the bank’s crypto asset products.”
The DFSA maintains that trading in crypto assets is not listed in Annex 1 of the Financial Business Act. Moreover, the activity is deemed unacceptable as an ancillary bank business due to concerns regarding financial stability. The regulator believes that “unregulated trading in crypto-assets can create distrust in the financial system.
Hence, the DFSA has now directed Saxo to “dispose of its own holdings of crypto assets,” citing that holding cryptocurrencies for the bank’s own account exceeds the legal boundaries established for Danish financial institutions. Nevertheless, the DFSA does not specify a deadline or indicate in the press release the timeframe for Saxo’s compliance with the recent ruling.
In a statement provided to Coindesk, a Saxo spokesperson expressed that the financial institution will “naturally take the decision of the Financial Supervisory Authority into account and will read it thoroughly to consider how we otherwise respond to it.”