Payment giants MasterCard and VISA to group crypto and ICO brokers into a new “high risk” category, sources say.
Payment giants MasterCard and VISA will soon group cryptocurrency and Initial Coin Offering (ICO) jurisdictions in a new “high risk” category, financial trading news site Finance Magnates reported Friday, October 12.
According to the Broker Complaint Registry, some details of the shortly upcoming classification by MasterCard had already become public in May of this year. The registry notes that binary options, CFDs, forex, cryptocurrency options, and ICOs will fall under a new category of “High-Risk Securities Merchants” starting on Oct. 12, 2018, and will be subject to additional monitoring.
According to Finance Magnates, the grouping means that chargebacks could now be executed up to 540 days after the actual date of the transaction.
Anonymous sources familiar with the matter confirmed to Finance Magnates that the new classification by MasterCard will reportedly start on Monday, Oct. 15, while VISA is planning to implement a similar grouping in December of this year.
The grouping targets all companies that operate their businesses without licenses or do not require them, the sources report.
Some associated businesses have already reported to their customers that they will stop accepting credit cards, according to Finance Magnates, meaning that the clients of brokers that operate poorly regulated businesses will have to rely entirely on wire bank transfers or turn to alternative payment options.
MasterCard’s reported announcement goes in line with the general anti-crypto stance publicly expressed by the company. In July 2018, MasterCard CEO Ajaypal Banga argued that anonymous, not-state-issued cryptocurrencies are “junk,” due to their high volatility and inability to operate as a medium of exchange.
VISA had stopped supporting crypto debit cards via a partnership with debit card provider WaveCrest in January of this year, with affected cards including products from CryptoPay, Bitwala, TenX, Wirex, and others.
Earlier today, Cointelegraph published an interview with well-known American economist Nouriel “Dr. Doom” Roubini, who had predicted the financial crisis of 2008. In the interview, Roubini again spoke negatively about cryptocurrencies, comparing them unfavorably to the traditional financial market, and claiming that major altcoin Ethereum (ETH) is a scam.