The mania surrounding bitcoin has become so pronounced that some people are taking out mortgages to get money to buy the red-hot cryptocurrency.
In an interview on CNBC
, Joseph Borg, President of the North American Securities Administrators Association and Director of the Alabama Securities Commission, warned that bitcoin investors are mortgaging their homes to get in on the action.
“We've seen mortgages being taken out to buy bitcoin,” Borg said. “People do credit cards, equity lines. This is not something a guy who's making $100,000 a year, who's got a mortgage and two kids in college ought to be invested in.”
Bitcoin began the year trading at $1,000 and soared past the $19,000 mark on the Coinbase exchange last week. But unlike the mortgage industry, bitcoin has not fallen under the eye of the Consumer Financial Protection Bureau and other financial regulatory agencies.
“As [technology] continues to accelerate and continues to increase, regulators have got to understand what it is that the innovation's coming up with and we're still trying to get educated,” Borg warned. “We're looking at it from a money transmission point of view but that doesn't cover the entire bitcoin space.”