In October 2018, the website Finance Magnates announced that these two payment giants were planning to consolidate cryptocurrency and ICO jurisdictions into a new “high risk” group. The representatives of MasterCard and VISA underlined that these measures were aimed at the improvement of safety and protection for investors, who shouldn’t lose more money than they put up. Besides, the preplanned restrictions will control the process of income gearing and the use of incentives, as well as guarantee indispensable risk management for depositors.
Who Enters the Category of ‘High Risk’ Merchants?
The abovementioned finance giants are going to restrict the activities of the following groups of dealers:
- The brokers, who run their business with no license. The website Finance Magnates cites the passage that the organizations of the kind work “from unregulated or loosely regulated environments”.
- The market specialists, who deal with Forex, binary options, cryptocurrencies, as well as Initial Coin Offerings.
- Dealers from non-European countries, such as the Balkans and the Far East. European businessmen, in their turn, will not be banned, but they’ll have to incorporate serious changes in their workflow, resulting from the updated regulatory requirements.
Will Crypto Brokers Really Terminate Their Businesses?
According to experts, many merchants will really have to disband their companies. This is the case of non-regulated organizations, first of all, which will be classified by the world’s largest credit card issuers as “high-risk” ones. All the transactions performed within the limits of these crypto-projects will have code 6211, which means that investors can perform chargebacks on their transactions within 540 days from the payment date.
It’s a very impressive term, especially when it comes to ICOs that last normally from a couple of weeks to several month. The thing is, that depositors will have now an excellent opportunity to charge their money back as soon as they feel that the campaign falls short of their expectations – no matter what the actual facts are.
Some blockchain startups, however, feel perfectly safe, hoping that the news announced by Finance Magnates is little more than the twisted perception of MasterCard’s anti-Bitcoin policy started in 2014.