Denmark Country Plans To Ban Some Bitcoin & Defi Wallets – Bitcoinik
Denmark has proposed new regulations that might ban the use of self-custody Bitcoin wallets and other decentralised finance (DeFi) platforms.
Denmark, a Nordic country known for its high standard of living, allows the legal trading, buying, and selling of cryptocurrencies. The Danish Financial Supervisory Authority oversees cryptocurrency activities to ensure compliance with financial regulations and prevent money laundering. Recent proposals suggest Denmark may be planning to bring more strict rules & laws to regulate the unregulated part of this innovative sector.
Denmark’s latest approved regulatory proposal could ban self-custody Bitcoin wallets and other DeFi interfaces, decentralised Cryptocurrency protocols.
The Danish Financial Supervisory Authority (DFSA) plans to ban all unregulated wallets due to concerns about unregulated cryptocurrency activities. Despite criticism, the DFSA argues this move will ensure crypto transactions are regulated and address a coverage gap in DeFi regulation.
If this rule is implemented, it will contradict the EU’s Markets in Crypto Assets (MiCA) guidelines and the US’s stance on BTC self-custody wallets. MiCA regulations, effective from December 30, 2024, do not apply to the DeFi sector and have been criticised for stifling innovation but there are huge chances that lawmakers will work later on this issue, probably in 2025.
DENMARK TO ABOUT TO BAN BITCOIN WALLETS
We have finally reached this point.
In the latest DeFi guidance of Danish FSA, the regulator goes too far: The guidance tries to capture everything in crypto regulation, including your Bitcoin wallet, using “interface” argument. DFSA says… pic.twitter.com/F7jFuLhNqC
— Mikko Ohtamaa (@moo9000) June 26, 2024
Estonia & self-custody wallet ban
Estonia, another European Union (EU) member country, has implemented similar rules on self-custodial wallets, which could negatively impact the sector in Denmark.
Crypto enthusiasts noted that if Denmark adopts these rules, no one will be able to offer Bitcoin wallets, DEX interfaces, or any token-related services without being regulated in Denmark’s jurisdiction & there are huge chances that similar measures will be adopted by other EU member countries.
In contrast, the US crypto infrastructure bill FIT21 Act has chosen to study DeFi, like MiCA, instead of regulating it. The DFSA is now seeking feedback from stakeholders on its proposals. That means, the American regulatory body decided to first study this unregulated sector, instead of direct ban/unban decision.
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