I understand the stated reasoning, but if this is the first such restriction (again, I don't know if it is), it's a pretty remarkable deviation relative to most credit card policies, i.e. we will happily finance whatever ridiculous decisions you choose to make. I wonder if they are seeing spiking default rates?
Yes; some examples:
https://www.bankrate.com/finance/credit-cards/naughty-things...
Normally the blocking is applied to merchants, rather than visible to the customers, but yes. Ironically this kind of thing used to be cited as a reason for bitcoin adoption.
> if you use a stolen credit card to buy something you have to have somewhere to ship it, therefore they can find the thief. with cryptocurrencies they just have to take a loss and open a new card.
Necessarily results in:
> credit/debit cards security model is absolute shit and should be illegal.
Can you describe a comprehensive alternative that would, at least in theory, be better.
As an analogy: if I come in to your house and steal your gold bullion while you're not looking, leaving little trace of my presence, does that mean the security model of houses is absolute shit and should be illegal?
The option for the credit card issuers is to:
a) stop offering chargebacks for crypto purchases
b) stop allowing crypto purchases
They opted for 'b' because it's easier.
(I suppose they could eat the cost themselves, but I can't see that happening)
Aside from state rules, some cards prohibit it, much like this new restriction on cryptocurrency.
Also, CA is one of the states which prohibits this.
Porn sites have a really hard time finding payment processors, due to the high rates of chargebacks.