Denmark is about to get a new Bitcoin exchange, promising future clients a crime-free platform on which to trade the virtual currency.
The CCEDK Crypto Coins Exchange Denmark ApS, which is due to open this month, is offering its trading platform to people across the globe, Chief Executive Officer Ronny Boesing said in an interview. The exchange will initially provide customers with the possibility to trade Bitcoin and Litecoin against each other, as well as in exchange for Danish and Norwegian kroner, British pounds, dollars and euros.
Safety has emerged as a key theme in determining Bitcoin’s fate as a viable payment form. The software was at the center of a money laundering scandal in January, when Bitcoin Foundation Vice Chairman Charlie Shrem was charged by U.S. Attorney Preet Bharara for allegedly attempting to sell the crypto-currency to narcotics traffickers. He denied the charges in April. The trial starts in September. Bitcoin then suffered a further setback in February when Mt. Gox filed for bankruptcy in Japan after it couldn’t account for 850,000 units of the virtual currency.
“Our strongest selling point will be that clients will know where we are, that the jurisdiction is Danish and that there’s complete transparency,” Boesing said. “We link to our lawyer on our website in case anyone feels they need one.”
The European Banking Authority in December cautioned against using Bitcoin and other virtual currencies, noting that no “specific regulatory protections exist that would cover you for losses if a platform that exchanges or holds your virtual currencies fails or goes out of business.”
Boesing said his exchange will operate as if it were overseen by a financial watchdog, because “there could be a decision to regulate this kind of business in the future. We are also ready for that.”
Denmark’s Financial Supervisory Authority said in December it was looking into the need for regulation. Michael Landberg, the watchdog’s chief legal adviser, said then the most likely outcome would be an “amendment to existing financial legislation so that we have regulation covering it.” Danish regulators will “seek to follow the mainstream,” he said, adding “it just needs to be regulated.”
Bitcoin has already encountered some hurdles in Scandinavia. A number of the region’s biggest banks have distanced themselves from the payment form and rejected requests from clients seeking to set up accounts amid concern the software could be used to aid crime.
SEB AB, the Nordic region’s largest currency trader, cited “large uncertainties” surrounding Bitcoin’s status, in a January interview. The bank said then it won’t offer transactions, accounts or currency exchange services in Bitcoin for that reason. Nordea Bank AB, Scandinavia’s biggest lender, said the same month it won’t offer any services related to trading Bitcoin and is advising clients of the risks associated with the payment form.
Boesing says his exchange will set aside 30 percent of revenue generated from trading crypto-currencies to create a buffer to protect clients from crime-related losses.
“The only way people will be able to lose money on our exchange is as a result of an investment loss,” Boesing said. “They’re protected from criminal acts.”