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Robinhood Wallet and Fomo memecoin buys may bypass card network rules
In tests by The Block, memecoin purchases made with Visa and Mastercard credit cards were coded as “digital goods media,” allowing users to earn standard rewards and avoid separate crypto KYC steps.
The Block reports that memecoin purchases on the Robinhood Wallet and Fomo apps can be made with credit cards through Apple Pay or Google Pay, without completing a separate identity verification step in the purchase flow.
In testing, The Block says memecoin transactions made with Visa and Mastercard credit cards were coded as “digital goods media,” a category typically used for products such as audiobooks and digital movies. Those transactions were also structured to earn ordinary credit card rewards, including points or cash back.
Chase told The Block the Visa transaction was not flagged as a cryptocurrency purchase, and that it believed the payment was assigned an incorrect category that should not have earned rewards, prompting it to open a case with Visa. The New York Attorney General’s office said it is aware of and reviewing the matter.
Crossmint, which powers the card-based memecoin purchases described by The Block, stands by the classification, pointing to the SEC stance that some memecoins can be viewed as collectibles in a securities context. Payments experts cited by The Block said card-network rules are a separate matter.