Recent Reports Show MasterCard And VISA Brand ICOs As High Risk
Earlier this week BitcoinExchangeGuide had reported how VISA and MasterCard had deemed buying bitcoin and cryptocurrencies as high-risk assets. Turns out there is more to the story.
How Will It Affect The Crypto Merchants?
The ban will be applied to brokers who operate “from unregulated or loosely regulated environments,” and therefore have no license that would show that proper due diligence has been applied to their business. The action reportedly deals with forex, binary, cryptos, and ICOs.
Back in April, it was reported that MasterCard is the first company to classify the industry as high risk. The move effectively meant that chargebacks could be executed up to 540 days after the date of the transaction. VISA came up with a similar announcement to MasterCard. The company has sent out a letter to payment processors that starting from December, transactions to forex, binary, crypto brokers and ICOs are becoming high risk.
EU-regulated brokers are enduring due to notable modifications to their operations arising from the new regulatory framework. Meanwhile, offshore and unregulated companies are now facing a challenge from the new policies implemented by VISA and MasterCard. The operations of some companies are set to get affected materially. That said, the eternal cat and mouse game between regulators and businesses is set to continue.
Over the past few months, the number of call centers for unregulated companies has not declined. New locations are sprouting across the Balkans, former Soviet Republics, and the Far East. Payment processors are also preparing new alternative solutions to address the roadblocks for their clients in the coming months.
Anti Crypto Pro Blockchain
It seems reasonable that the largest credit players on the market want to put unregulated players under more scrutiny and dodge potential risks, as seems to be a general trend: many countries have at least announced their regulatory frameworks, while the US regulators seem to have extended their purview to fight scammers on the market. It is worth emphasizing that the alleged move by Mastercard and VISA won’t target compliant players. Mastercard has been putting a lot of effort into studying blockchain and securing patents related to the technology but has openly declared its anti-crypto attitude.