Are Mastercard and VISA Cutting Out Unregulated Crypto Brokers and ICOs?

On October 12, Finance Magnates reported that payment giants Mastercard and VISA will both soon group cryptocurrency and Initial Coin Offering jurisdictions in a new "High risk" category.

Thus, non-regulated brokers would reportedly be classified as "High-risk securities merchants" by VISA and Mastercard, brining similar limitations outside of the EU. Consequently, such transactions would be labeled with code 6211, meaning that chargebacks made by clients on those transactions can still be executed for up to 540 days.

Allegedly, Finance Magnates' sources stated that the new classification by Mastercard had started on October 15, while VISA was planning to implement a similar grouping in December of this year.

Neither Mastercard nor VISA have commented on the matter as of press time.

Cointelegraph has reached out to Mastercard representatives for further comment, but have yet to receive an answer.

There were similar reports in May. Previously, in May, Finance Magnates reported similar news, announcing that Mastercard was going to single out binary options, CFDs, forex, cryptocurrencies, and ICOs as "High risk" businesses in a "Well-coordinated campaign" that involved "Several regulators and government agencies." The write-up quoted a letter allegedly written by a "Partner bank", stating the following: "If the merchant is unable to obtain an updated license, we will cease processing applicable high-risk securities transactions from such merchant until provided with an updated license."

At the time, Finance Magnates wrote that Mastercard's regulation was "Effective from the 12th of Oct. 2018, which is 6 months since the payment processors have received the letter," with the changes affecting "All transactions globally via Mastercard, Debit Mastercard, and Maestro." Starting then, every payment processor processing the transactions of a high-risk securities merchant are supposed to show to Mastercard that adequate due diligence has been applied.

There have been no official statement from Mastercard confirming or refuting this news.

It is worth stressing that the alleged move by Mastercard and VISA won't target compliant players.

Mastercard's relationship with crypto is rather complex: the company has been putting a lot of effort into studying blockchain and securing patents related to the technology, but has publicly expressed its anti-crypto stance.