(Article published by Alex Kleydints with same title in Medium)

Following the example set by Facebook, VISA and MasterCard, are putting a ban on everything Crypto by categorising Crypto transactions as high-risk.

Unlinking VISA and MasterCard from Crypto

The high-risk categorisation essentially means that merchants and brokers, which are somehow connected to Crypto, may see their merchant accounts frozen or terminated.

This will make it extremely hard, if not impossible, for Crypto-exchanges and Crypto companies to transact from and to VISA and MasterCard cards.

Why is this happening?

Although Crypto will over time make banks and card issuers completely obsolete, this is not the reason why the card issuers are implementing the ban. Most likely it’s the lack of KYC and AML compliance, which today is a legitimate issue. Every player in the current financial model needs to be KYC and AML compliant. (KYC stands for Know Your Customer. Every business, and especially a financial institution, is required by law, to know the identity of each customer. AML stands for Anti Money Laundering. For larger amounts the client needs to be able explain the source of the funds).

We are starting to witness a clash between the centralised financial system, which is bound by KYC and AML regulations, and the decentralised regulation-free and anonymous Crypto community.

In the centralised financial system banks perform the KYC & AML compliance checks

Card issuers always relied on banks to perform the needed KYC and AML compliance checks. That’s why, in most cases, you got your credit and debit cards via banks. Banks always check your identity and continuously monitor your transactions, to check for suspicious activity for AML compliance.

Banks are the gatekeepers to the centralised financial system. They perform all the needed KYC and AML compliance checks. That’s why when you pay with a VISA or MasterCard, you don’t have to go through KYC or AML checks every time. The Merchant can trust the bank to check the KYC and AML compliance of your funds.

Crypto, by design, is not KYC and AML compliant

Anyone can create a wallet and can put any amount of Crypto in that wallet. No one checks the identity of the person who created the wallet or the source of the funds in that wallet.

In Crypto there are no gatekeepers, which check the identity of people or the source of funds. That’s why Crypto is incompatible with the KYC and AML regulated financial system.


By it’s design, Crypto is incompatible with the strictly KYC & AML regulated financial system.