Denmark denies it had any intention of banning Bitcoin wallets

Contrary to recent social media reports that Denmark is "about to ban" Bitcoin wallets, Danish regulators have clarified that there are no proposals to ban self-custody crypto wallets.

The Danish Financial Supervisory Authority (DFSA) addressed the misinformation, highlighting its position and regulatory approach to decentralized crypto assets.

The DFSA has denied claims circulating on social media about a potential ban on hardware and other non-custodial wallets. Tobias Thigesen, DFSA director of fintech, payment services and governance, said:

We are aware of misinformation circulating on social media that the DFSA intends to ban hardware wallets and other non-custodial wallets. This is false. The DFSA has not proposed such a ban.

The explanation by the DFSA followed the regulatory assessment of decentralization under the Markets in Crypto Assets (MiCA) Regulation, which came into effect on 30 June. The DFSA's assessment, published on June 25, outlined principles for addressing the challenges of regulating decentralized services related to crypto assets.

Tigesen noted , that MiCA expressly exempts crypto asset services provided in a fully decentralized manner without intermediaries from regulation. Services regulated under the Act must include an intermediary and deal with the activities listed in Article 3(16) of MiCA, such as crypto custody and trading.

"Hardware wallets do not transmit the private keys to the provider and thus are not regulated by MiCA. Non-custodial portfolios are inherently not subject to MiCATigesen explained.

For example, a software wallet that directly executes orders on a decentralized exchange on behalf of clients may require permission if a legal entity has control over the offering and provides that specific activity as a service to clients, the DFSA official said. Thigesen stressed:

These cases are often very complex and will require a case-by-case assessment. The intention is to provide awareness of the potential regulatory requirements and to emphasize that the DFSA is open to dialogue in order to understand whether specific proposals in Denmark fall within the scope of MiCA or not.

The DFSA's clarification aims to dispel misinformation and provide clear guidance on the regulatory status of self-custody portfolios in Denmark. By providing accurate information and encouraging dialogue, the DFSA aims to support the growth and regulation of decentralized crypto asset services within MiCA.