Chase Probes Meme Coin Purchases Made with Credit Cards

The controversy surrounding meme coins and credit card purchases has escalated as Chase asked Visa to investigate how transactions are being classified. Users of Robinhood Wallet and social trading application Fomo have been able to purchase meme coins with credit cards without completing a separate know-your-customer verification process, thanks to crypto payments infrastructure company Crossmint's Token Checkout product.

Crossmint's checkout system allows users to interact with third-party payment infrastructure, enabling an external provider to handle the conversion between card payments and blockchain assets. This means that users can purchase tokens, such as dogwifhat (WIF), through both applications using Visa and Mastercard credit cards connected to Apple Pay or Google Pay.

The transactions are being classified under merchant category code 5815, which is generally associated with digital goods media, rather than cryptocurrency purchases. This distinction has significant consequences for how banks and card networks treat the purchases, as users can receive conventional points or cashback rewards when buying meme coins.