[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.