- Robinhood and Fomo allegedly allowed meme coin purchases via credit cards without KYC verification.
- Chase has sought a Visa investigation, while the New York Attorney General’s Office has launched its own probe.
Users of Robinhood Wallet and social trading app Fomo discovered they could purchase meme coins, including dogwifhat (WIF). They can use Visa and Mastercard credit cards, Apple Pay, and Google Pay, without completing any separate KYC identity verification. The transactions went through, earned standard credit card points and cash back, and nobody flagged them at processing.
Instead of being classified under merchant category codes 6012 or 6051, the standard crypto categories that typically carry a crypto indicator and exclude purchases from card rewards. The transactions were processed under MCC 5815, which covers digital goods and media. That classification meant the purchases looked like any other digital content buy to the card networks.
Crossmint, the crypto infrastructure company powering the transactions through its Token Checkout product, has defended the categorisation. The company points to joint SEC and CFTC guidance released in March that treats certain meme coins, including WIF, as digital collectables rather than crypto assets. It is framing that supports the digital goods classification.
Where Did it Start Unravelling?
Chase, JPMorgan‘s banking arm, reviewed the transactions and landed on a different conclusion. The bank determined that the Visa purchases had been misclassified. The transactions were not flagged as crypto, and the MCC assignment was incorrect. Also, the purchases should not have qualified for credit card rewards.
Chase has formally filed a case inquiry with Visa and asked the network to investigate. Moreover, the New York State Attorney General’s Office has also acknowledged the matter. Further confirmed it is reviewing the payment structure.
What This Means for the Market
If meme coins can be purchased through mainstream payment rails without KYC and while earning card rewards, the on-ramp to crypto just got significantly wider, not through regulatory approval but through a classification loophole.
In addition, lower friction, familiar payment methods, and reward points on meme coin purchases remove several of the barriers that have historically kept casual buyers out of the market.
But the regulatory interference surrounding this structure from Chase, Visa, and the New York AG simultaneously suggests the window may be short. How Visa rules on the misclassification question will determine whether this payment method survives or gets shut down before it scales.
If the structure holds, expect more platforms to replicate it. If regulators close it, the conversation shifts to how tightly payment rails will ultimately be locked down around crypto purchases.
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