Robinhood Wallet, Fomo Allow Card Purchases of Memecoins Without KYC; JPMorgan Seeks Visa Probe
Summary
- Robinhood Wallet and Fomo allow users to buy memecoins with credit cards without separate KYC checks.
- The purchases were classified as digital goods/media rather than cryptocurrency transactions, allowing users to receive card rewards such as points and cash back.
- JPMorgan Chase asked Visa to investigate the alleged misclassification, and the New York State Attorney General's Office said it is also reviewing the payment structure.
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Users can buy memecoins with credit cards on Robinhood Wallet and the social trading app Fomo without undergoing separate know-your-customer, or KYC, checks.
The Block reported on September 1 that users can directly purchase memecoins including dogwifhat, or WIF, on Robinhood Wallet and Fomo through Crossmint using Visa and Mastercard credit cards. Payments are also available through Apple Pay and Google Pay. The transactions were processed without separate KYC procedures.
The setup has drawn scrutiny because the purchases were classified as "digital goods/media" rather than cryptocurrency transactions. In tests conducted by The Block, users were able to receive standard card benefits such as points and cash back, just as they would with ordinary credit-card purchases.
Chase, JPMorgan's banking arm, asked Visa to investigate after determining the payments had been misclassified. The bank's position is that the transactions should not qualify for credit-card rewards.
Regulators are also reviewing the matter. The New York State Attorney General's Office said it is examining the payment structure.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.