Bank of Queensland Bans Cryptocurrency Purchase with Mortgage Loans

The Australian retail institution changed its rules in order  to rule out usage of equity loans for crypto trading as prices change rapidly and regulators increase scrutiny on virtual currencies.

Australian Bank of Queensland has banned using mortgage loans for acquisition or trading with cryptocurrencies due to the high volatility of the virtual coins, local media reported on Thursday.

The lender’s amended policy now rules that “any loan purpose that involves the acquisition of or usage of cryptocurrency is unacceptable”, according to Australia Financial Review newspaper.

“They [the banks] are concerned because the Australian Taxation Office, Treasury, the Reserve Bank of Australia and AUSTRAC are crawling all over it,” one anonymous broker told the newspaper.

The broker explained that Australia’s government bodies are monitoring the bank accounts to detect any sign of using funds for cryptocurrency trading.

The country’s virtual coin market grew significantly last year, according to a report of the Australian Digital Commerce Association (ADCA) and the consultancy company Accenture. Cryptocurrency trading reached A$3.9 billion (more than $2.8 billion) in 2017 with more than 300,000 active users, with Bitcoin (BTC) and Ethereum (ETH) being the top traded digital currencies.

As the crypto trading expands with leading players like Huobi launching services in Australia, the regulators step up establishing rules for the industry. Recently, the AUSTRAC (Australian Transaction Reports and Analysis Centre) has implemented new rules for digital exchanges, including registration regime, as well as anti-money laundering (AML) and counter-terrorist financing (CTF)rules requirements.

Several days ago, the Australian Tax Authority (ATO) said that the agency will seek international cooperation to tackle hiding of cryptocurrency income. This year Australian traders must file tax declarations about their crypto incomes for the first time after ATO has declared virtual coins like Bitcoin an asset liable for capital gains tax (CGT).

This month Australia, along with the United States, the United Kingdom, Canada, and the Netherlands established an international alliance, J5, which unites their tax authorities in a bid to fight money laundering and tax avoidance, including crimes related to cryptocurrency.