Judge Katherine Polk Failla has told Chase that the extra fees they charged customers who were purchasing cryptocurrency was uncalled for as cryptocurrency purchases are not counted as a cash advance. The Judge denied Chase’s motion to dismiss complaints from the plaintiffs, who took Chase to court over the fees they were charged for purchasing cryptocurrency with a credit card, as reported by Bloomberg Law, August 3, 2019.
Big Win for U.S. Crypto Customers
While banks in India have been forced by the central bank to terminate their relationship with cryptocurrency-focused firms, banks in the U.S. have voluntarily taken to imposing their will on customers who transact in cryptocurrency.
Chase, one of the largest commercial banks in the world, charged their customers’ extra fees for purchasing cryptocurrency as they believed it was counted as a cash charge. However, the plaintiffs have argued that several instances of American law and statements from regulators show that cryptocurrency is not a form of cash as it isn’t legal tender. Using this argument, the plaintiffs were able to sway the judge who promptly ruled that the plaintiffs have given a rational explanation for “cash-like transactions”.
Failla explains that the complainants are defining the word cash as context to fiat money, issued by decree of a sovereign entity. Chase, on the other hand, argues that cash applies to any means of payment including but not limited to cryptocurrencies and fiat money.
The judge has not taken sides and merely noted that the plaintiff’s defense is a valid argument and can proceed as a class-action lawsuit.
Taking Advantage of Regulatory Uncertainty
This instance highlights the need for bank customers who deal with cryptocurrency to diligently check their statements. The possibility of a bank taking advantage of a grey area and charging unnecessary fees to customers is more likely than ever before.
Banks have been accused of targeting cryptocurrency enthusiasts by censoring their accounts without an explanation and charging hidden fees. Wells Fargo, for instance, doesn’t allow its account holders to purchase cryptocurrency with their cards – which is basically blocking an individual from spending their own money in whichever way they like.