Rumors have been flying around social media, causing quite a stir, but the truth is Denmark isn’t banning Bitcoin wallets.
Despite what you might have heard, the Danish Financial Supervisory Authority (DFSA) has made it clear that there is no proposal to ban self-custodial cryptocurrency wallets.
Tobias Thygesen, the director of fintech, payment services, and governance at the DFSA, firmly stated that the regulator has no plans to ban hardware wallets or any other form of non-custodial wallets. He said:
“We are aware of some misinformation circulating on social media suggesting that the DFSA intends to ban hardware wallets and other non-custodial wallets.”
A classic case of regulatory misinformation
The rumor about a possible wallet ban likely stemmed from a recent regulatory assessment related to Europe’s Markets in Crypto-Assets (MiCA) Regulation.
The MiCA regulation, which came into effect on June 30, has caused a flurry of discussions and confusion in the community.
The DFSA’s assessment, published on June 25, was meant to address challenges in regulating decentralized crypto asset services. Unfortunately, it seems some people misinterpreted the content, leading to the spread of false information.
The assessment laid out principles to help people in the crypto market understand when their services are considered truly decentralized.
So, what exactly does it mean for an offering to be truly decentralized? The DFSA’s paper outlines the elements that form the basis for assessing whether an offering can be considered fully decentralized, as you can see in the image below.
It’s a important distinction because completely decentralized offerings aren’t subject to MiCA regulation and thus don’t need a license.
By the end of 2024, new rules will regulate Denmark’s crypto market, including both issuers and service providers. But if a service is fully decentralized, it’s not covered by these rules.
Tobias Thygesen emphasized the importance of these principles. They are designed to assist relevant actors in determining whether their offerings can be classified as fully decentralized.
This classification is not just a technicality; getting it wrong could mean providing services unlawfully.
Reporting by Jai Hamid
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