The relationship between the crypto community and banks around the world are far from being ideal. Moreover, the process of crypto adoption will take time as many private and governmental organizations are not ready to endorse cryptocurrencies. Recently, the six-largest bank in the world, JPMorgan Chase Bank, settled a crypto-related lawsuit.
Investment bank settled a lawsuit connected with unannounced changes made to the fee structure applied to cryptocurrency purchases made using its credit cards in 2018.
According to Brady Tucker, Ryan Hilton, and Stanton Smith, Chase Bank violated its cardholder terms of service during January 2018. Furthermore, plaintiffs asserted that JPMorgan Chase Bank introduced the fee structure for cash advances to cryptocurrency purchases without providing any warning as to the change.
JPMorgan Chase and crypto purchases
Major U.S. bank sought to argue that cryptocurrency purchases compromise “cash-like transactions.” This was the position of JPMorgan Chase during a previous hearing. According to the bank, crypto purchase compromise “cash-like transactions” as per its terms of service. Thus, it did not breach its contract with cardholders.
Nevertheless, in August, Judge Failla ruled that the plaintiffs proved that “cash-line transactions” referred only financial institutions tied to fiat currency such as traveler’s check and cash.
Interestingly, Chase presented another argument. JPMorgan Chase claimed that the adjusted fee schedule was the result of Coinbase changing its merchant category code. Coinabase changed the code from “purchases” to “cash advances.”
Brady Tucker filed the lawsuit in April 2018. JPMorgan Chase sought dismissal of the case in July 2018. However, Tucker filed an amended complaint alongside Smith and Hilton.
Moreover, the trio claimed to represent a class of potentially thousands of Chase Bank clients impacted by the unannounced changes.
It is important to note that both sides have 75 days to submit their stipulations of settlement.
The Crypto industry is evolving; banks should explain how they plan to interact with the crypto community.