Danske Bank, based in Copenhagen, Denmark, has advised customers against investing in cryptocurrencies, the company announced on its website. The bank, which has branches in Trondheim, Norway, and Vilnius, Lithuania, does not presently permit cryptocurrency transactions on its website. Cryptocurrencies are not backed by a central bank; hence, the bank claims they lack the investor and consumer protection typically connected with traditional currencies and investments. Secondly, cryptocurrencies have been highly volatile, and the price formation is non-transparent, the notice stated. Because of this, investors have very limited insight into how the market is developing and what factors drive the price. Most Important: Lack Of TransparencyThe bank cites the lack of transparency and regulatory control as the most important reasons for not investing in cryptocurrencies. These factors have made cryptocurrencies a target for criminal purposes such as money laundering and extortion. Danske Bank claims a financial institution has an obligation to assist in the fight against money laundering and other financial crimes. Cryptocurrencies at present do not provide a sufficient level of transparency for the bank to meet anti-money laundering (AML) obligations, the notice stated. An excerpt read:For these reasons, it is not possible to trade cryptocurrencies on the bank’s trading platforms. However, the bank does monitor the market closely, and if the cryptocurrency market becomes more transparent and mature, the bank might reconsider this position.”We do not in any way want to support the investment environment surrounding cryptocurrencies,” the notice added. It has phased out the possibility of purchasing financial instruments directly related to the prices of cryptocurrencies. Such instruments can include exchange trade notes that mirror the price of cryptocurrency, the bank noted. Such securities, it claimed, are characterized by high risk and volatility. Also read: Nordea bank bans employees from owning bitcoin, unions consider legal actionBank Will Accept Certain DepositsIf a customer seeks to deposit funds originating from cryptocurrency investments, the bank said it would treat it in the same way as deposits stemming from other types of investments. The bank may accept the deposit if it complies with current regulations and AML procedures. Danske Bank does not block the use of its bank-issued credit card in connection with trading cryptocurrencies. But, as with all credit card transactions, customers are advised to comply with existing AML anti- procedures and regulations. Featured image from Shutterstock