Australian Regulators Crack Down On Cryptocurrency Speculation

Cryptocurrency crackdowns continue to occur as more institutions limit what can and can’t be used to buy the currency. The Australian Bank of Queensland recently instituted a policy that bars homeowners from using the equity in their home to purchase cryptocurrencies such as Bitcoin, Ethereum, or Litecoin. The July 12th announcement is the latest in restrictions imposed on how buyers can obtain funds to invest in cryptocurrency or other high-risk investments. The bank supported its decision by stating that these investments are high-risk, and making a poor decision could create a devastating financial impact on a person’s finances. The bank is currently updating its loan contracts to inform consumers that using funds for this purpose is forbidden. Borrowers could utilize redraw features with their mortgage to buy crypto if they wanted. They could also obtain more payments on their loans to go above the minimum payment amounts. Most lenders offer this service for account with variable rates without fees if the request is submitted online. Investors could also obtain a line of credit to purchase crypto. Bankers are proactive in tracking borrowers’ accounts and inquiring with them to inform them of the regulations on investing and cryptocurrency purchases. Financial Review reported that brokers are concerned because multiple organizations including the Reserve Bank of Australia and Austrac, Australian Taxation Office, and the Treasury are highly invested and cracking down on regulations. The majority of lenders still offer crypto-loans, exclaiming that they generally don’t ask consumers about what they're using the borrowed funds for. The Australian Tax Office or ATO is implementing strict regulations on crypto investors. The office is adamant about ensuring that all crypto investors pay taxes on their earnings and intends to use data-matching technology to scrutinize trades and ensure compliance across the board to prevent tax evasion from cryptocurrency gains. Australia announced in April that cryptocurrency exchanges are subject to anti-money laundering rules by requiring digital currency exchanges to register with authorities. They are also required to implement procedures for identity verification and follow through with strict reporting procedures on transactions and people who utilize them.