Latest Effort to Politicize Banking Services Makes the Case for DeFi and Censorship Resistance
New York Times columnist Andrew Ross Sorkin may be the best thing to happen to crypto this year, Coindesk writes, showing the world that we need censorship-resistant alternatives to TradFi now more than ever.
The New York Times columnist took a victory lap this weekend when the International Standards Organization (ISO) created a new merchant category code (MCC) for credit or debit card purchases at gun stores to make those transactions stand out. Until now, such stores have been included in the broader category of sporting goods stores (code 5941, should you be wondering).
For years Sorkin had been advocating the creation of such a code to help financial institutions flag suspicious activity in the hopes of preventing mass shootings, and criticizing Visa (V) and Mastercard (MA) for resisting such calls. His campaign followed a Times investigative series on the unwitting role the banking industry played in financing such massacres.
Amalgamated Bank, the union-owned New York lender, applied for the code’s creation earlier this year, was rejected, then tried again. In the wake of the May school shooting in Uvalde, Texas, the second application succeeded. On the eve of the code’s creation, Sorkin declared that it would “test the resolve of business leaders and their commitment to American lives.”
Never mind that gun buyers trying to fly under the radar now have an incentive to pay with cash (or perhaps cryptocurrency, where it’s accepted), or to make the purchase at Bass Pro Shops rather than a specialist firearms retailer.
Never mind that, depending if the code is used and how “suspicious activity” is defined, law-abiding gun buyers could end up the subjects of suspicious activity reports (SAR) filed by bankers erring on the side of caution. Those SARs, including subjects’ sensitive personal information, will sit in a government database for an indefinite period. The code is also likely to become a “high-risk merchant” category, meaning gun sellers would end up paying steeper fees for access to the card networks, to compensate banks for the added monitoring burden, payments industry veterans said.
Never mind that clamping down on how mass shootings occur is at best a short-term fix, and not the same thing as addressing the reasons why they occur.
If nothing else, Sorkin has succeeded in further politicizing the payment system and further deputizing financial institutions as unpaid informants for law enforcement.