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Tl;dr: 1. Created off shore merchant accounts for credit card processing. 2. Lied about the product, so it was given a lower processing rate. 3. Banks proces
by rootsudo 6y ago
Tl;dr:
1. Created off shore merchant accounts for credit card processing.
2. Lied about the product, so it was given a lower processing rate.
3. Banks processed and did settlement in USA.
4. Chargebacks most likely led to compliance to look over transactions, when it's signaled that it was contraband - handed over to legal.
5. Banks are required to share to USA Govt.
6. USA Govt intercepts them.
- toomuchtodo 6y agoThis is just terrible risk management on the part of these technology practitioners. You don't lie to your financial services providers, you don't break US federal law, otherwise you go directly to jail if you make enough noise (~$100M in volume) and transit the jurisdiction.
- curryst 6y agoI'm also guessing there's some compliance mess involved. I can't imagine that all banks have some moral stand on not banking for marijuana businesses. My guess is that processing charges for them constitutes some from of "providing banking services for illegal money" since marijuana is still illegal federally (and most large banks tend to be multi-state). This is the bank passing the buck on that. "We didn't violate that law, the customer lied to us."