Visa Moves to End Memecoin Credit Card Rewards Loophole Tied to Crossmint
OpenZeppelin says released versions of its Contracts library will remain open source permanently under the MIT License, but future versions are unaddressed.
Visa is directing payment processors to stop coding memecoin purchases as ordinary digital goods, a change that would strip credit card rewards from such transactions, according to a report by the newsletter Crypto in America published on September 19.
The directive closes a channel that ran through Crossmint, a platform for secondary sales of memecoins it classifies as collectibles rather than securities. Crossmint’s checkout was integrated into Robinhood Wallet and Fomo, and Visa card purchases through those apps were labeled under MCC 5815, the merchant category code intended for digital media such as streaming movies or audiobooks. Because the transactions carried no crypto-asset flags, buyers earned ordinary points and cash back, and could spend up to $1,000 a day without any Know Your Customer check, with total volume capped at $1 million.
The change followed a September 1 investigation that first exposed the coding anomaly. Chase was the first issuer to flag the category to Visa, calling it inappropriate and referring the matter to the network. In the weeks after the investigation, the GENIUS and DEGEN tokens were made unavailable through Crossmint’s Apple Pay checkout after the firm was asked about their classification, and the New York Attorney General Letitia James’ office said it was aware of the product and looking into it.
Per the Crypto in America report, Visa gave processors a grace period expected to end the week after September 19. After that, memecoin purchases must be processed as typical cryptocurrency transactions, subject to the network’s standard rewards restrictions. The report cites a single unnamed source and correspondence it reviewed; Visa has declined to comment.
Crossmint said its position has not changed. A spokesperson said the company maintains good standing with Visa, Mastercard and its other card network partners, and that its procedures on digital goods will be updated only if the guidance they rely on is. The checkout itself remained live on both apps as of September 19. The company has argued the MCC 5815 category was appropriate given Securities and Exchange Commission guidance treating some memecoins as akin to collectibles, a reading payments experts reject as a basis for card-network classification.
