Employees of Nordea bank will no longer trade Bitcoins or any other cryptocurrency as of February 28 following a decision by the bank as regulators because of the high risks involved.
The reason is that the bank and its employees are not protecting from the risks involved in investing in cryptocurrencies.
“Unlike trading of securities and currencies, trade of cryptocurrencies is not regulated by any authority, and as such investors who buy cryptocurrencies have no protection against illegal business practices and money laundering,” it said.
A bank’s spokeswoman Afroditi Kellberg told Bloomberg on Monday that the bank has a right to set internal policies in that area that affects its staff.
“It is widespread practice across the banking industry to restrict the personal account. Thus, dealing of staff to prevent them taking positions in speculative investments. Else which might expose them to a risk of financial loss and therefore impact their financial standing”.
The bank clarified that while this was not a policy as such but a recommendation even to its clients.
The bank recommends that those who already own Bitcoins should sell them, although there is no obligation to do the same. However, they will not allow buying.
Cryptocurrencies are mostly unregulated, and many companies have been taking a cautious approach. Regulators are all over preparing for regulation for the industry.
Sweden’s Financial Supervisory Authority says institutions need to be left to decide their regulations allowing. Else restricting employees to make investments and trading.
Nordea follows the Bank of America which has banned clients from investing in one of Bitcoin mogul Barry Silbert’s top funds last month. This is according to report by Reuters.
Others who might take the same position include Danske Bank A/S, Denmark’s most prominent financial group. However, which is already discourages employees from trading Bitcoins but has not decides whether a full ban is requires.
Not many agree that a bank should regulate what its employees should or should not invest in. Although Denmark’s FSA has warned the public about the risks, it says only lawmakers can impose curbs.