Danske Bank which is one of the biggest banks in Denmark published in a document indicating that it would not be involved in any cryptocurrency transactions. Established in 1871, the document highlights a number of concerns it has regarding cryptocurrency market, with a statement
“They lack the investor and consumer protection typically connected with traditional currencies and investments.”
Reasons cited by the bank is the inability for any investor or customer to determine how the market works and the high risks incurred by the investor if their investment goes south. Also, the high volatility of the virtual currency market is emphasized.
Any market transaction that can not be regulated or be carried out in a transparent manner leaves room for criminally minded individuals. Citing the recent hacks that took place in Asia in January, the biggest cryptocurrency hack yet. Danske adds that it has “an obligation to assist in the fight against financial crime and money laundering,” concluding that “At the current stage, cryptocurrencies do not offer the sufficient level of transparency in order for us to live up to our obligations within anti-money laundering regulation.” These are the reasons why it is not possible to trade cryptocurrency on our trading platforms, Danske states.
However, measures have been put in place in order to maintain its stand stating that it “do[es] not in any way want to support the investment environment surrounding cryptocurrencies.”
One of the measures includes phasing out the possibility to buy financial instruments directly related to the price of cryptocurrencies,” such as “derivatives or ETNs [Exchange Traded Notes]” that mirror the price of a cryptocurrency. “These types of securities,” Danske asserts, “are characterized by high volatility and risk.”
Danske has said it will monitor the market closely and would consider investing into cryptocurrency if the market shows a high level of transparency and maturity. However, the bank has also stated that it would not block the usage of a Danske Bank issued credit cards in connection with trading cryptocurrencies. Danske bank will also treat “deposited funds originating from cryptocurrencies the same as deposited funds stemming from other types of investments.” irrespective of the measures being put in place.
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