Denmark Bans Bitcoin Wallets. What You Need to Know!
Journalist
- Denmark reportedly plans to regulate self-custody wallets and other “DeFi interfaces.”
- Denmark’s plan does not mirror the MiCA guidelines nor the treatment of self-custody BTC wallets in the US.
Self-custody wallets are very common. Bitcoin [BTC]Trading Protocol’s Mikko Ohtamaa reacted to the Danish Financial Supervisory Authority’s (FSA) recent DeFi guidelines. Trading Protocol’s Mikko Ohtamaa reacted to the Danish FSA’s recent DeFi guidelines. Note:
“In the Danish FSA’s recent DeFi guidelines, the regulator has gone too far.” The guidelines try to encompass everything related to crypto regulation, even your Bitcoin wallet, by using the “interface argument.”
Ohtamaa said the interface theory could affect anyone, including Bitcoin wallet providers.
“You don’t have to think about it very long to realise that everything you see is an interface. Your computer, your web browser, your Bitcoin wallet, your Uniswap site, etc.
What will happen to Bitcoin if Denmark implements its plans?
The DFSA considered a possible move due to a “perceived loophole” in EU MiCA (Markets in Crypto Assets), which is set to come into force on December 30, 2024. MiCA regulations do not apply to decentralised financial services.
Ohtamaa strongly criticized the DFSA, pointing out that it is not a good thing. You can also read more about the proposal by clicking here. Offering BTC wallets to Danish consumers could be challenging.
This means that anyone offering Bitcoin wallets, DEX interfaces or any other token-related products to Danish citizens must comply with Danish regulations.
Despite Estonian reports that it took a similar approach to self-custody wallets, this was recently rebuffed by the US.
Lawsuits against Coinbase Wallet were dropped in March In the SEC vs. Coinbase case, self-custody wallets won a victory in the US.
SEC wanted to stop developers from building peer-to-peer applications. Didn’t work’
The FIT21 Act (US Crypto Infrastructure Bill) was recently passed by the US Congress. Choose a reputable company to work with DeFi should be investigated, just like MiCA. Instead of regulating DeFi.
The DFSA is currently seeking feedback from private players. It remains to be seen how the DFSA will adopt and improve the DeFi proposals.
According to Ohtamaa’s report, adopting the DFSA proposal in its current form could have a negative impact on those offering self-custody Bitcoin wallet services in Denmark via apps or browsers.
