DFSA Refutes Claims of Bitcoin Wallet Ban in Denmark

• DFSA confirms that there are no plans to ban self-custodial crypto wallets in Denmark.
• MiCA exempts self-custodial wallets from regulation due to the fact that there are no intermediaries.
• Social media posts falsely claimed Denmark would ban Bitcoin wallets.

Recent social media reports suggesting that Denmark was about to ban self-custodial cryptocurrency wallets have been debunked by the Danish Financial Supervisory Authority (DFSA). Contrary to these claims, Danish regulators clarified there are no plans to prohibit hardware or non-custodial wallets. Tobias Thygesen, the DFSA’s director for fintech, payment services, and governance, addressed the misinformation circulating online, confirming that no such ban has been proposed.

The confusion regarding the alleged ban seems to stem from the Markets in Crypto-Assets (MiCA) Regulation, which took effect on June 30. According to the DFSA, self-custodial wallets are exempt from MiCA regulations because they do not involve intermediaries. MiCA targets activities like crypto custody and trading, which require intermediary involvement. Thygesen emphasized that the only regulated activity related to wallets involves the custody and administration of crypto-assets on behalf of clients. Since hardware wallets do not transfer custody of private keys to the wallet provider, they fall outside the scope of MiCA.

The false rumors about the ban originated from a social media post by Mikko Ohtamaa, co-founder of the algorithmic investment protocol Trading Strategy. Ohtamaa misinterpreted the DFSA’s assessment, mistakenly believing that by exempting self-custodial wallets, the DFSA aimed to stop offering such wallets in Denmark. This misinterpretation led to widespread misinformation online.

Self-custodial wallets allow users to store cryptos like Bitcoin without intermediaries, providing full control over their crypto assets. These wallets do not require Know Your Customer (KYC) procedures, and the private key is the sole method of verifying ownership. 

Self-custodial wallets come in various forms, including software-based wallets like MetaMask and hardware wallets like Ledger or Trezor. While these wallets empower users to be their own bank, they also bear the full responsibility for maintaining their security.