Bank of Queensland bans using home equity loans for crypto

Lenders are banning property buyers from using home equity to buy cryptocurrencies because of regulatory fears and increased risk from volatile trading conditions.

Bank of Queensland is the latest to ban any drawdown or lines of credit from loans to be used for leveraged purchases, trading or other use of the largely unregulated global digital currency.

Other lenders are discouraging borrowers and mortgage brokers, who act as intermediaries between lenders and borrowers, from using real estate to fund high-risk investments.

Leveraged currency plays can magnify gains from a successful investment decision but worsen losses.

Lenders are asking questions and monitoring borrowers’ accounts to alert them to crypto-trades, purchases, or offshore trades or funds movement, according to a mortgage broker familiar with the market.

“They are concerned because the Australian Taxation Office, Treasury, the Reserve Bank of Australia and Austrac are crawling all over it,” said the broker, who did not wish to be named.

Lenders and prudential regulators are also concerned to prevent anything that might worsen the nation’s worrying household debt levels, which is already among the world’s highest.

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Source: Bank of Queensland bans using home equity loans for crypto | afr.com