Mortgage Maybe Denied to Previous Bitcoin Sellers
Many cryptocurrencies have managed to become valuable in their price within the last year, opting owners to sell off their digital assets and use them as payment methods for new products and services. While Bitcoin does translate properly in value, one Reddit user claims that financial institutes may deny home owning services to clients that have previously sold their Bitcoins.
During the height of Bitcoin last year, when the digital currency was valued at almost $20K, the cryptocurrency industry saw many of its investors and traders sell their coins to profit from its soaring value. Outlets reported a rising trend in Bitcoin sellers buying luxury products and services and more through Bitcoin.
Given that crypto-fiat conversion is a complicated process, selling off Bitcoin for fiat currency during its peak involved several different methods. Any transaction valued at half the price of Bitcoin at the time, $20000, was made even more complex. Earlier this week, one Reddit user explained how PNC Bank had denied him a mortgage loan after realizing that his attempted purchase of a home was through Bitcoin-obtained funds.
He continued to say that his application process was incredibly taxing and that PNC’s requirements during the initial mortgage application had no mention of Bitcoin anywhere. Eventually, once he provided everything required by the bank, it was revealed that PNC had denied his request due to his previous coin selling activities. More so, the bank stated that any money used to pay for the mortgage must have absolutely no relation to Bitcoin or cryptocurrency sales.
Mortgage denial is not uncommon when related to Bitcoin. Several banks have denied applicants applications due to the relationship with coin sales. UK banks refused to interact with cryptocurrencies due to the rise in malicious laundering attempts through digital coins.
Mark Stallard, a broker, said that mortgage lenders were not prepared to deal with cryptocurrencies and the new technology, nor equipped to handle it. The BSA has stated that financial institutes are cautious and fear any transaction with crypto due to notorious money laundering attempts occurring everywhere. As cryptocurrencies remain unregulated in the UK, digital assets pose the biggest risk related to laundering, further instilling fear within banks.