Payment processors Worldpay and Visa are at the center of complaints about cryptocurrency traders after charging their accounts wrongly.
Dozens of users of Coinbase, America’s largest cryptocurrency exchange, took to Reddit, the social network, late last week to complain about unexpected fees on credit and debit cards used to purchase cryptocurrency.
Some people claimed that their bank accounts were wiped out before the refunds were applied, while others said they were subjected to overdraft fees.
“I’ve been charged four times and my account has been completely drained,” said one user on Reddit.
The fees initially fell to Coinbase, which has grown rapidly over the past year as digital currencies such as Bitcoin have made headlines.
Coinbase has had other payment issues in the past, including earlier this year a bout of seriously overdue wire transfers. However, the congregation was not responsible for the false accusations this time around.
Over the weekend, Worldpay and Visa issued a joint statement acknowledging that “this issue was not caused by Coinbase.”
Two sources with direct knowledge of the situation said that the issue was related to the Merchant Class Code (MCC) assigned to Coinbase by payment processors. MCCs are essential for transaction processing because they help card issuers assess the risks of accepting a transaction.
Coinbase claimed Thursday That Visa caused the problem, but Visa denied that it had made “any changes to the systems that would result in duplicate transactions being reported by cardholders”.
In the past, Visa has indicated that it is up to the financial institution acting on behalf of the merchant to transfer MCC accounts to the Visa payments system; They are also responsible for assigning a MCC token to the merchant.
Worldpay fulfills that role for Coinbase, according to the two people familiar with the matter.
In a statement on Friday, Worldpay said, “We are actively working with and engaging with all relevant parties – including card networks, issuing banks, other processors, and Coinbase – to resolve this issue.”
Worldpay did not respond to further requests for comment.
One of the people briefed on the situation said that by Saturday evening, the “root cause” of the problem was still unknown.
The dispute is the latest example of the increasingly blurred lines between the fast-growing cryptocurrency industry and the traditional financial sector, and illustrates the complex problems facing financial institutions as an increasing number of individuals seek to integrate into the cryptocurrency market.
Regulators in countries such as the United States, Germany and France have recently spoken of their concerns about the lack of clear rules for digital currencies, unlike the highly regulated financial industry.