Robinhood Wallet Allows Card Purchases of Memecoins Without KYC; JPMorgan’s Chase Seeks Visa Probe
Summary
- Users were found to be able to buy memecoins with credit cards on Robinhood Wallet and Fomo without a separate KYC process.
- The transactions were classified as digital goods/media, allowing users to receive credit-card benefits such as points and cash back.
- JPMorgan’s Chase and regulators have begun an investigation and review into how the Visa payments were classified.
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Users can buy memecoins with credit cards on Robinhood Wallet and the social trading app Fomo without a separate know-your-customer, or KYC, process.
The Block reported on September 1 that users could buy memecoins including dogwifhat, or WIF, directly through Crossmint on Robinhood Wallet and Fomo using Visa and Mastercard credit cards. Apple Pay and Google Pay were also available, and the purchases appeared to require no separate KYC checks.
The setup has drawn scrutiny because the payments were classified not as crypto transactions but as "digital goods/media." In tests by The Block, users were able to receive standard card perks such as reward points and cash back, as with ordinary credit-card purchases.
Chase, JPMorgan’s banking unit, viewed the Visa payments as improperly classified and asked Visa to investigate. The bank said the transactions should not qualify for credit-card rewards.
Regulators are also reviewing the matter. The New York Attorney General’s Office said it is examining the payment structure.
