the Danish West India Company was authorized to trade with the colonies which it

established in the West Indies;

In addition,colonial trade was confined to Denmark so that the manufactures of the
mother-country could be exchanged for the tropical staples of the islands.
The Danish West India Company's policy of buying cheapand selling dear, coupled
with onerous import and export duties and other charges were all incentives for the
colonists to deal withsmugglers.
In the face of inadequate law-enforcing machinery, shipswere accustomed to slip
away during the night without securingclearance or paying their dues.
Under-registering the size and volume of cargoes might thus mean that the duties
paid would amount only to a fraction of the legal rate charged on goods that came
from or went to non-Danish European and American ports.
Pirates were attracted to the West Indies by the wealth which was offered by the
newly-discovered lands and, accordingly, they attacked settlements and shipping.
They received the blessings of their respective national governments who were
either jealous or afraid of the power of Spain, but lacked the means of open
defiance.
I think to some extent if the Danish West Indies had not participated in illegal trade it would not have
benefited the Europeans because trade was confined to Denmark so that the manufactures of the
mother-country could be exchanged for the tropical staples of the islands (Dookhan, Ch 6 page 87). Also,
the Danish West Indian Company would buy cheap commodities and sell them for much more
(Dookhan, Ch 6 page 99), and they would under-register the size and volume of their cargoes so that the
duties paid would amount only to a fraction of the legal rate charged on goods that came from or went
to non-Danish European and American ports (Dookhan, Ch 6 page 100). If you constructively add up all
the money they saved by doing these illegal activities it's quite beneficial. On the other hand, the people
already had quite a stable financial standing to start with so you could say its just greed.