- It will have virtually no effect on customers
- The bank has been under heightened regulatory scrutiny for a month
Danish bank Saxo has been ordered by the financial regulator to get rid of its crypto assets. The Danish Financial Supervisory Authority (FSA) explained that under current law banks are not allowed to engage in ancillary banking activities in view of the financial stability of. The statement writes:
“Saxo Bank traded crypto assets with its own funds to cover risks associated with offering other financial products. However, this does not change the fact that such activity itself is not permitted for financial institutions in the country.”
According to the FSA, Saxo Bank provides its customers with the ability to trade various cryptocurrency products through its platform. The regulator added that the bank’s cryptocurrency activities are recognized as illegal and cryptocurrencies can be speculated.
Saxo Bank also has its own crypto portfolio, which is used as a hedge to offset the market risk associated with the bank’s cryptocurrency products.
The bank’s spokesman, Lasse Lilholt, commented on the FSA decision:
“Of course, we are taking the FSA’s decision into account and will consider how to respond to it. As a Saxo Bank customer, you don’t own the underlying cryptocurrency, but instead you buy a financial product that follows the price of the cryptocurrency.”
He also stated that Saxo Bank has a “very limited cryptocurrency portfolio” that is used primarily to hedge a small portion of the risk associated with facilitating cryptocurrency transactions.