Visa to Close Crossmint Memecoin Rewards Loophole Behind Card-Based Token Buying

Visa is moving to close a loophole that allowed memecoin purchases to earn credit card rewards, after an investigation found that card-powered token sales on two popular trading apps sidestepped the card network’s rules on cryptocurrency purchases.

According to a report citing the findings, the payments giant will end the classification that let memecoin buys on Robinhood Wallet and the Fomo app qualify for card rewards. The Crossmint-powered memecoin sales were still live on both apps as of Saturday, but Visa’s grace period for the reclassification is expected to end next week, per the report.

How the loophole worked

The scheme centered on how the transactions were coded. Card networks, including Visa, treat direct cryptocurrency purchases as cash-equivalent transactions, which typically means cash-advance fees, no rewards accrual, and stricter protections compared with ordinary retail spending. Those rules exist partly because regulators and issuers consider speculative asset purchases on revolving credit a consumer-protection risk.

The workaround, as described in the original investigation, routed memecoin purchases through Crossmint, a payments and tokenization infrastructure provider, in a way that presented the transactions to the card network as purchases of digital goods or rewards-eligible items rather than raw crypto acquisitions. The practical effect was that users could buy memecoins with a credit or debit card and still earn the card’s reward points or cashback, something a direct exchange purchase would never permit.

The investigation also drew scrutiny over the onboarding path. Robinhood Wallet and Fomo were reported to face questions over know-your-customer-free memecoin purchases, since the card-based flow appeared to allow token buying without the full identity verification typically required at dedicated crypto exchanges. Card-network rules require merchants to follow proper authorization categories, and a payment processor classifying speculative token buys as generic digital rewards sits in an obvious gray zone.

Robinhood Wallet is the self-custodial arm of the retail brokerage giant, which has spent 2026 expanding aggressively into crypto, from its own layer-2 chain to tokenized equities. Fomo, a newer memecoin-focused trading app, has been one of the breakout consumer crypto products of the year, at times rivaling Pump.fun in daily revenue on the strength of card-based purchasing convenience and a slick mobile onboarding funnel. That convenience, it now appears, relied partly on a merchant-coding treatment that Visa is preparing to shut down.

Why card networks care

For Visa, the issue is less about memecoins themselves than about the integrity of its transaction categories. Merchant category codes determine fees, rewards liability, chargeback rights, and regulatory treatment across the entire payments stack. If a processor can relabel a speculative crypto purchase as a rewards-eligible digital good, every rule built on those categories weakens, and issuers end up funding cashback on transactions they would never knowingly approve.

The move also fits a broader tightening trend around crypto and payment rails. Banks and card issuers in several jurisdictions have restricted crypto purchases on credit entirely, citing both consumer-protection concerns and anti-money-laundering obligations. United States regulators have sharpened scrutiny of platforms that enable speculative trading without full KYC, and prediction-market and memecoin apps have repeatedly tested where the boundaries sit.

What happens next

The timing gives the apps limited room to maneuver. Unless they restructure their payment flows before the grace period lapses, card-based memecoin purchases would either be declined, reclassified as cash-equivalent transactions with their higher fees and zero rewards, or migrated to debit-only rails where treatment differs. For Fomo in particular, whose growth has been fueled by frictionless card onboarding, the change is a genuine product risk. For Robinhood, a company with a regulated brokerage stack and full KYC elsewhere in its app, the fix may be more mechanical.

The episode is a reminder that in crypto’s consumer era, some of the most consequential rules are not written by the SEC or the CFTC but by the card networks, whose merchant codes quietly decide what a hundred million plastic-and-phone wallets can actually buy. Neither Robinhood nor Crossmint has publicly detailed an alternative flow, and observers expect the processors to negotiate category treatment directly with the networks. Visa closing this particular door suggests the era of rewards-earning memecoin buying on credit may be drawing to a close, and the apps that grew on it will need a new funnel.