Memecoin credit-card purchases draw Chase and NY AG scrutiny
Regulation & Gov ·
Robinhood Wallet and Fomo let users buy memecoins with credit cards by labeling the transactions as digital goods rather than crypto, a classification that has now drawn attention from a major card issuer and a state regulator.
According to The Block, the two platforms code memecoin purchases as "digital goods media" transactions, a category that falls outside the crypto-purchase rules card networks typically apply. That classification appears to let the transactions bypass restrictions card networks have put in place around cryptocurrency purchases, allowing users to buy memecoins directly with a credit card.
Chase has opened a case with Visa over the practice, and the New York Attorney General's office is separately reviewing it, according to the same report. A related account of the cluster notes that JPMorgan and the New York Attorney General are investigating purchases made without KYC checks, tying the regulatory interest not just to the digital-goods coding but to the absence of identity verification on these credit-card memecoin buys.
Multiple accounts describe the same underlying mechanism: transactions are coded as digital media or digital goods to sidestep card-network restrictions on crypto purchases. Leviathan News and WuBlockchain both cover the arrangement, with the cluster's four distinct sources converging on the same core claim that Robinhood Wallet and Fomo are circumventing payment-network rules through this classification.
What remains unresolved is how Visa and Chase will respond to the case now open with the card network, and whether the New York Attorney General's review will result in formal action against either platform. It is also not yet clear whether other card issuers beyond Chase are examining similar transactions, or whether Robinhood Wallet and Fomo will alter their transaction coding in response to the scrutiny.