The Australian Bank of Queensland has put a ban on all property buyers using home equity to purchase cryptocurrencies, according to Financial Review on July 12. The Bank of Queensland is so far the latest financial institution to ban credit lines from loans in making leveraged purchases or used in crypto trading. The bank provided an acceptable explanation for the ban with the significant high-risk of these type of investments, showing that even though leveraged currency trades can be more profitable, a bad taken investment decision could turn out decimating.
Currently, the Bank of Queensland is reviewing and updating all loan contracts, awakening clients that any loan purpose which entangles the acquisition and accession of or utilization of cryptocurrency is not conforming to accepted usage.
A lot of potential borrowers could get loan money from for a real property to buy cryptocurrency with the help of redraw features that are offered together with the mortgage and these borrowers could only access extra payments to their ratified loan accounts which surpass minimum required payments, according to Financial Review. However, a lot of lenders provide service on mutable rate accounts, and no fees in case the request to have the money right away from a redraw is submitted directly online.
Another popular method to use loans to purchase cryptocurrencies was to establish a major line of credit whereby potential borrowers could draw on this line of credit with the help of property equity such as ATM.
Bankers are already making major inquiries and tracking borrowers’ accounts in order to alert them of crypto trades and funds movements, according to the mortgage broker expert with the market.
“They are concerned because the Australian Taxation Office, Treasury, the Reserve Bank of Australia and Austrac are crawling all over it,” the mortgage broker said.
Many potential lenders continue to inspect and regulate cryptocurrency loans, yet they don’t question clients on how they spend out the borrowed funds.
In June this year, tax experts assured that the Australian Taxation Office (ATO) is taking grim and forbidding measures on cryptocurrency investors in this very year.
Liz Russell, a senior tax agent at Etax.com.eu, revealed that ATO is now on the ‘warpath’ to guarantee that Australian citizens are paying any charges and loans owed via crypto trading.
The Australian government officially announced in April this year that crypto exchanges MUST follow the new anti-money laundering rules, and these new rules have it that digital currency exchanges must fully register with responsible authorities and consign to different checking and reporting processes.