People in the UK trying to get a mortgage with profits from their Bitcoin investments are reportedly facing issues as banks show reluctance on how to deal with profits from cryptocurrency investments.
Bitcoin is a type of cryptocurrency – it is the most common and best known encrypted digital currency.
A report by the British newspaper The Sun said that “investors are being knocked back by mortgage lenders amid fears about money laundering.”
The report cites issues that one broker Mark Stallard, of House and Holiday Home Mortgages, encountered regarding Bitcoin investors trying to acquire a mortgage.
“The first mortgage lender I rang asked me what a cryptocurrency was.
“I rang two other lenders and they said they would not touch it.
“When I mentioned where the money had come from there was massive reluctance to help or understand the problem.
“I do not believe the mortgage providers in general are ready for this issue and research tells me that a lot more people will be knocking on our doors with funds made or raised in this fashion,” Stallard said.
There is currently no regulation of the cryptocurrency in the UK and users are completely anonymous. This level of anonymity has raised concerns about how people acquired their Bitcoin or what it has been used for.
Whilst the exact numbers on criminal activity in digital currencies are difficult to pin down, an analyses by Australian researchers using forensic finance techniques concluded that almost half of all transactions in bitcoin are associated with buying and selling illegal goods and services, including weapons, pirated software and drugs.
In this context, ‘forensic’ refers to using scientific or technical methods to try to solve crimes.
The Building Societies Association said:
“There is currently no regulation of these electronic currencies, which puts them into the highest risk category in relation to money laundering.
“In addition, it is well known that such currencies are popular with criminals, who use them to launder the proceeds of crime.”
However, Bitcoin investor Max Wilde said that the reluctance of Bitcoin is “ludicrous”.
Wilde told The Sun:
Cryptocurrency has become the cash grab of our generation. There are a whole group of over 50s who don’t understand what cryptocurrency is and went from laughing at it to being worried by it and assume that in some way it’s dodgy or illegitimate. It’s ludicrous.
Video – What is a cryptocurrency?
We have all read and heard about them, but are not sure what they are and why people use them. Watch this Market Business News video if you want to know the basics of cryptocurrencies.