Denmark’s FSA Orders Saxo Bank to Dump Crypto Holdings | Finance Magnates

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Denmark’s
financial markets supervisor has demanded that Saxo Bank dump its
cryptocurrency holdings. The Danish Financial Supervisory Authority (FSA)
stated this in a statement released today (Wednesday), noting that the
multi-asset broker’s trading in digital assets for its own accounts falls
outside the investment bank’s “lawful area of activity.”

As a bank that specializes in online trading and investment, Saxo Bank offers
a wide range of financial products and services, including online trading in
stocks, bonds, commodities, forex, contracts for difference, fiat currencies and
cryptocurrencies.

According
to the FSA, the Copenhagen-based investment bank hedges its crypto assets to
match the market risk associated with its digital asset products. However, the
regulator noted that trading in crypto is not part of the supported
activities listed in Appendix 1 of the Danish Financial Business Act.

“Unregulated
trading of crypto assets can create distrust in the financial system, and the
Danish FSA finds that legitimising trading in crypto-assets would be
unjustified,” the financial watchdog explained. “Thus, the activity cannot be
accepted as an ancillary banking activity for reasons of financial stability,
cf. section 24 of the Danish Financial Business Act.”

Furthermore,
the regulator pointed
out that because the European Union’s recently
passed crypto
regulation, Markets in Crypto-Assets (MiCA), will only come into enforcement in
its entirety on December
30, 2024, crypto trading among financial institutions “remains unregulated for
the time being.”

“We naturally take the decision of the Financial Supervisory Authority into account and will read it thoroughly to consider how we otherwise respond to it,” Saxo Bank said in a statement shared with Finance Magnates, pointing out that its customers get exposure to cryptocurrencies without owning them.

“With regards to this, we have held a very limited portfolio of cryptocurrencies, solely to hedge a very marginal proportion of risk associated with the facilitation of crypto assets. The vast majority of this exposure is mitigated through exchange-traded and cleared products,” the Danish investment bank elaborated. “Therefore, the FSA’s decision will have a very limited impact on our business, and our client will not experience any significant changes.”

Saxo Bank’s
FX Volume Drops 8% in June

Meanwhile, on Wednesday, Saxo Bank released its monthly trading volumes for June 2023,
reporting a decline of 8% in its forex trading volumes. The volume came in at
$119.5 billion, with the daily average falling 5% to $5.4 billion.

However,
compared to the same month last year, the drop in total forex volume in June 2023 is
much more significant: the volume went down 22% from $152.5 billion. Similarly, the daily average volume plummeted 21% from $6.9 billion.

Since the
start of 2022, Saxo Bank’s monthly forex trading volumes have been undulating, finally sinking to $102.8 billion in April, which is the lowest volume since December
2021. However, the volume later picked up, jumping 27% to $130.5 billion in May, only to drop
again last month.

Across all
markets, Saxo Bank’s trading volumes weakened 4% to $391.7 billion, with the
monthly volumes from its trading activities in commodities and fixed income
slumping 21% and 13% to $32.1 billion and $6.6 billion, respectively. On the
contrary, trading volume in equities strengthened 2%, rising from $228.2
billion in May to $233.5 billion last month.

New COO at Marex; LCH RepoClear’s service merger; read today’s news nuggets.

Denmark’s
financial markets supervisor has demanded that Saxo Bank dump its
cryptocurrency holdings. The Danish Financial Supervisory Authority (FSA)
stated this in a statement released today (Wednesday), noting that the
multi-asset broker’s trading in digital assets for its own accounts falls
outside the investment bank’s “lawful area of activity.”

As a bank that specializes in online trading and investment, Saxo Bank offers
a wide range of financial products and services, including online trading in
stocks, bonds, commodities, forex, contracts for difference, fiat currencies and
cryptocurrencies.

According
to the FSA, the Copenhagen-based investment bank hedges its crypto assets to
match the market risk associated with its digital asset products. However, the
regulator noted that trading in crypto is not part of the supported
activities listed in Appendix 1 of the Danish Financial Business Act.

“Unregulated
trading of crypto assets can create distrust in the financial system, and the
Danish FSA finds that legitimising trading in crypto-assets would be
unjustified,” the financial watchdog explained. “Thus, the activity cannot be
accepted as an ancillary banking activity for reasons of financial stability,
cf. section 24 of the Danish Financial Business Act.”

Furthermore,
the regulator pointed
out that because the European Union’s recently
passed crypto
regulation, Markets in Crypto-Assets (MiCA), will only come into enforcement in
its entirety on December
30, 2024, crypto trading among financial institutions “remains unregulated for
the time being.”

“We naturally take the decision of the Financial Supervisory Authority into account and will read it thoroughly to consider how we otherwise respond to it,” Saxo Bank said in a statement shared with Finance Magnates, pointing out that its customers get exposure to cryptocurrencies without owning them.

“With regards to this, we have held a very limited portfolio of cryptocurrencies, solely to hedge a very marginal proportion of risk associated with the facilitation of crypto assets. The vast majority of this exposure is mitigated through exchange-traded and cleared products,” the Danish investment bank elaborated. “Therefore, the FSA’s decision will have a very limited impact on our business, and our client will not experience any significant changes.”

Saxo Bank’s
FX Volume Drops 8% in June

Meanwhile, on Wednesday, Saxo Bank released its monthly trading volumes for June 2023,
reporting a decline of 8% in its forex trading volumes. The volume came in at
$119.5 billion, with the daily average falling 5% to $5.4 billion.

However,
compared to the same month last year, the drop in total forex volume in June 2023 is
much more significant: the volume went down 22% from $152.5 billion. Similarly, the daily average volume plummeted 21% from $6.9 billion.

Since the
start of 2022, Saxo Bank’s monthly forex trading volumes have been undulating, finally sinking to $102.8 billion in April, which is the lowest volume since December
2021. However, the volume later picked up, jumping 27% to $130.5 billion in May, only to drop
again last month.

Across all
markets, Saxo Bank’s trading volumes weakened 4% to $391.7 billion, with the
monthly volumes from its trading activities in commodities and fixed income
slumping 21% and 13% to $32.1 billion and $6.6 billion, respectively. On the
contrary, trading volume in equities strengthened 2%, rising from $228.2
billion in May to $233.5 billion last month.

New COO at Marex; LCH RepoClear’s service merger; read today’s news nuggets.

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