Australian bank bars equity loans for crypto investments

13 Jul, 2018
by Fifi Arisandi
News
Australian bank bars equity loans for crypto investments

The Bank of Queensland has banned the use of home equity loans for buying cryptocurrencies. 

The Australian Bank of Queensland has just banned property buyers from using home equity loans to buy cryptocurrencies. As reported by Cointelegraph, the bank is updating loan contracts with a statement that declared "any loan purpose that involves the acquisition of or usage of cryptocurrency is unacceptable".

In Australia, a property mortgage is offered with a redraw feature, which enables borrowers to access additional payments to their loan accounts that exceed minimum required payments. Borrowers can submit requests to access the money from a redraw, which usually offered on a variable rate accounts. Apparently, this facility has been used by some borrowers to fund their crypto investment activities. 

According to a mortgage broker familiar with the market, banks are now making inquiries and tracking borrowers' accounts used for crypto-related activities due to "they are concerned because the Australian Taxation Office, Treasury, the Reserve Bank of Australia and Austrac are crawling all over it."

Following the Australian government's announcement on April that obliged all cryptocurrency exchanges to follow new anti-money laundering rules, last month, a senior tax agent said that the Australian Taxation Office (ATO) is on the "warpath" to ensure all crypto investors pay the right tax amount by “doubling down with its data-matching technology."

The Bank of Queensland is reported as the latest institution to ban credit lines from loans to be used for cryptocurrencies tradings. The bank justified the ban with the high-risk nature of this kind of investments, stating that although it can be lucrative, a poor decision could prove devastating.

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