Crypto-backed mortgages still raise red flags, says B.C. regulator

Posted by Graeme Wood,

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B.C.’s mortgage regulator continues to sound warnings about anyone considering purchasing a home with cryptocurrency.

The BC Financial Services Authority says there is nothing prohibiting buyers from using such unregulated digital currencies, however there are limited protections and persisting unknown risks in doing so.

The concept garnered significant media attention in December when Toronto-based lender Ledn announced a $70-million investment for building a Bitcoin-backed mortgage product.

“This mortgage will enable Ledn clients to use their Bitcoin holdings to purchase a property while continuing to benefit from potential price appreciation of both assets,” the company wrote.

A client wishing to take out a Bitcoin mortgage needs to own as much Bitcoin equivalent to the property value or purchase price. The company will issue a loan equal to 50% of the combined value of both assets…read more.