Court Upholds Nordea Bank’s Ban on Employee Bitcoin Purchases
Nordea, a Danish Bank, won a court case allowing it to prevent staff from buying Bitcoin and other cryptocurrencies.
Nordea first banned its employees from owning bitcoin in January 2018, after which Danish finance and workers’ rights figures threatened legal action.
A major private bank in the Nordic region, Nordea had a total equity of over 32.4 billion euro in 2016, and a net income of 3.7 billion euro that same year.
A Danish court yesterday ruled that Nordea Bank could prevent staff from buying and trading cryptocurrencies, according to a Bloomberg report. They also are banned from buying crypto on behalf of others, too. What penalties the bank will levy on employees who break the rule remains unclear.
Staff is free to hold any crypto they already own, but is “encouraging” them to sell what they have and refrain from making future investments.
Nordea bank points to risks and a lack of industry regulation for its decision to advise staff against participating in digital asset markets.
The court-issued a press release says staff shouldn’t conduct trades in financial instruments to the point that it puts their own financial position in jeopardy.
Nordea, furthermore, still allows staff to invest in the bank’s own cryptocurrency-based products and financial instruments. The product development staff at Nordea may make “minor investments in cryptocurrency when they have a legitimate business reason to do so.
Included in the bank’s blockchain-based offerings are products like we.trade, which was launched with pilot customer’s making live trades.
“The vision for we.trade is to create a common platform which allows companies, from SMEs to large corporates, to trade in a fast, easy and transparent way,” reads a press release issued by Nordea. “The aim is to fully automate the trading process and seamlessly connect the entire trade ecosystem. The launch of we.trade has seen the completion of the first ever bank guaranteed trade transaction on a multi-party blockchain network in Europe.”
The bank claims it is the first of its kind. “The we.trade platform creates trust in the trading system and reduces the catch-22 that occurs at the beginning of a trade,” said Patrik Zekkar, Head of Trade Finance & Working Capital Management at Nordea.
Nordea’s goal is to bring other Nordic and European banks onto the platform in the future. “This is a massive disruptive change for the industry,” said Zekkar. “This is just the beginning and I don’t think we can really foresee where it will take us. It’s not just about digitalising existing trade processes or part of the existing supply chain, it’s about totally changing the set-up of how we conduct our trade. It’s an order-to-payment set up – order all the way to cash.”
The bank closed the account of Norwegian cryptocurrency exchange Bitmynt AS in December 2017. The founder of Bitmynt sued Nordea, but lost his case in May 2018.