[nomocrypto]

To be totally fair, and I know I’m a data point of one, I bought some crypto currency on my credit card (about $75 worth) because I don’t really trust any of these exchanges not to screw up and leak my info, or screw up and charge me improperly. And it’s a lot easier to report a fraudulent credit card charge than get your money back. In fact, this follows my pattern of “buy everything on my credit card unless the merchant absolutely refuses to accept credit”.

[ajross]

> because I don’t really trust any of these exchanges

And Wells Fargo agrees!

To paraphrase you: you used your credit card because you felt the transaction was a risk and wanted to shift that risk onto another party. Banks don't like their legislatively-mandated fraud forgiveness being used as a risk buffer, and this is the tool they have in their box to deal with that.

[mcherm]

Actually, these are two different risks. nomocrypto is worried about the risk that the exchange will misuse his payment information to make bogus bank transfers; Wells Fargo is worried about the risk that nomocrypto will fail to pay back the card. The credit card issuers are not particularly worried about fraudulent "merchant" charges.

[ajross]

I'm not sure that's a distinction with meaning. Ultimately nonocrypto is worried that the exchange will behave in shady, fraudulent ways to which he doesn't want to be exposed. Ditto for the bank. The fact that the most obvious expression of those two kinds of fraud are different doesn't really change the risk analysis much. Someone willing to game one end of a system is likely to try to game the other.

> The credit card issuers are not particularly worried about fraudulent "merchant" charges.

Sort of true, but... isn't that exactly what happened here? The reasons banks don't sweat merchant fraud is that they can just refuse to do business with them. And here Wells Fargo is preemptively deciding that all exchanges are shady.

[gowld]

Chargebacks aren't a risk between cardholder and bank/processor. Vendors pay chargebacks, so chargebacks are a risk between vendor and bank. If a vendor is high-chargeback, or at risk of not paying back chargebacks, bank/processor should ban the vendor.

non-payment of credit card debt is risk between cardholder and bank/processor. bank/processor should prefer to ban customers like this, not vendors (if possible). Customers can "launder" money through many sources (cash advance, cashback, shady businesses) if they intend to put that money in a speculative investment and maybe not pay back the debt.

bank vs processor is another dimension of complication to sort out.

[michaelt]

Well, presumably Wells Fargo is worried about two things: The buyer not being able to pay them back AND that the buyer's card details are being used fraudulently.

Can't ding their credit rating if their card details got stolen.

[chimeracoder]

> Wells Fargo is worried about the risk that nomocrypto will fail to pay back the card. The credit card issuers are not particularly worried about fraudulent "merchant" charges.

Yes, they are different risks. But the issuer is still worried about fraudulent charges initiated by the merchant, in addition to the risk that nomocrypto will fail to pay off the balance.

[abalone]

> But the issuer is still worried about fraudulent charges initiated by the merchant

Are they though? Generally the risk of merchant fraud is borne by that merchant's processor. There is some overhead for the issuer in processing chargebacks, but if this were an issue then we'd expect to see many other types of fraud-prone online merchants being banned.

It seems clear that this is an extension of the common prohibitions on using credit cards for gambling.[1] But I should add that it's not that they're worried about failure to repay. That risk is generally controlled by credit limits. It's the fraudulent chargebacks that cardholders initiate when they lose their money.

[1] https://www.creditcards.com/credit-card-news/10-things-credi...

[chimeracoder]

> Are they though?

Yes, they definitely are. Trust me on this one.

[bilbo0s]

"...because I don’t really trust any of these exchanges..."

Not to put too fine a point on it, but that's exactly why many banks will begin to take actions like these. It is terrible though that crypto purchases are starting to be placed in the same risk category as porn.

(Actually, now I think about it, crypto is being put in a HIGHER risk category than porn. Ouch.)

[FireBeyond]

> (Actually, now I think about it, crypto is being put in a HIGHER risk category than porn. Ouch.)

Which isn't unwarranted. Porn companies have challenges, and as shady/deceptive as some of them are in rebilling, they also have a limited number of processors they can use, so they have an interest in not getting kicked off.

Shitcoins don't care. Milk up all the cash you can, disappear. Who cares whether the processor cans your account?

[woah]

What are you even talking about? Shitcoins? These are exchanges which have just as much reason to want to keep their credit card processing as any business.

[soundwave106]

Sure, but the problem is the seemingly very high amount of shady behavior in cryptocurrency. EG: In one category, you have reports like this that say 81% of ICOs are scams. (https://www.bleepingcomputer.com/news/cryptocurrency/81-perc...)

That's pretty damning to me. I would be willing to bet that 81% of porn sites are not scams. So putting crypto as a higher risk category seems correct to me.

(I also recognize that there's legit exchanges, especially outside of the world of ICOs, but crypto seems to have a massive fraud issue now.)

[pavlov]

The correct point of comparison is probably gambling, since that’s the outcome most people expect from cryptocurrency.

[bdcravens]

> crypto purchases are starting to be placed in the same risk category as porn

> crypto is being put in a HIGHER risk category than porn

Most banks won't let you open up a merchant account for your porn site, but they typically won't block purchases from said sites.