Today, the Danish Financial Supervisory Authority (Danish FSA) ordered Saxo Bank to sell all of the cryptocurrencies it holds in its own account.

The Danish bank provides services to clients, including the ability to invest in exchange-traded funds (ETFs) and notes (ETNs). It also enables direct crypto trading by clients, which it refers to as ‘Crypto FX’. To back this up, he has cryptocurrency in his own account as a hedge, and this is where the regulator gave direct instructions to sell his holdings.

Based on local laws, the FSA said that “Saxo Bank’s trading of crypto assets on its own account is found to be outside the legal trading area of ​​financial institutions.”

The FSA did not directly instruct the bank to stop client activities, but stated that “unregulated trading in crypto assets can create mistrust in the financial system, and the Danish FSA considers that it would be unfounded to legitimize trading in crypto assets.” He said it undermines stability under the Financial Business Law.

However, he noted that cryptocurrency trading is only not regulated until the end of 2024, when the EU’s Markets for Crypto Assets Regulations (MiCA) come into force.

Last week, Saxo Bank was designated by the FSA as a systemically important financial institution.

Internationally, the Basel Committee has introduced rules for banks holding crypto assets, making holding crypto relatively unattractive compared to tokenized securities.

Meanwhile, the Danish regulator has adopted another blockchain law, the EU DLT Pilot Scheme. Six months before the law went into effect as part of his FT Lab sandbox, he began exploring a consortium led by Deon Digital to use a blockchain-based system for tokenized green bonds. EU law provides some limited exemptions to existing securities laws.

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