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JPMorgan Chase was accused of charging massive fees and higher interest through cash advances on customers’ crypto purchases using the Chase Bank credit cards.
Wall Street banking giant JPMorgan Chase & Co (NYSE: JPM) finds itself in yet another controversy in the crypto space. No, it’s not the usual Jamie Dimon’s Bitcoin bashing saga. Rather, Chase Bank is looking to settle a class-action lawsuit that accuses the bank of overcharging the cryptocurrency transaction fees.
Two years back, the plaintiff had filed the lawsuit in the Manhattan federal court alleging that Chase Bank charged some surprise charges to customers using the Chase credit cards to purchase cryptocurrencies. The plaintiff also mentioned that the bank treated his purchases as cash advances and charged a higher fee and interest rates.
As part of this settlement, JPMorgan will now pay $2.5 million as per the court’s decision. The original suit asked only $1 million for all customers, however, the final settlement is much higher.
Plaintiffs Brady Tucker, Ryan Hilton, and Stanton Smith said that the bank refused to refund them all the surprise charges. On the other hand, JPMorgan initially defended its position and remained dismissive of the plea. The Chase bank argued that the purchases were “cash-like transactions” and instead said that its customers can use the debit cards to avoid cash advances.
The plaintiffs stated that such categorization was only applicable to fiat currency transactions. In March 2020, the Manhattan Federal Court judge ruled in favor of the plaintiffs.
JPMorgan Goes Soft on Crypto
After Jamie Dimon’s Bitcoin bashing rant throughout the entire 2018, his own bank seems to be taking a soft stand for Bitcoin. Taking a 180-degree turn over cryptocurrencies, JPMorgan is reportedly establishing ties with cryptocurrency exchanges. As per Forbes, Dimon is reportedly holding secret meetings with Coinbase chief.
Last month, JPMorgan signed new deals with crypto exchange Coinbase and its rival Gemini after a long vetting period. As per WSJ, the banking giant approved two crypto exchanges’ accounts and even started processing transactions. It seems that the bank is no more willing to stay at odds with the crypto industry developments. Or probably, it just can’t afford to do so!
Instead, JPMorgan has itself adopted the blockchain and crypto route to serve its institutional clients. The Wall Street bank is working on its own blockchain platform dubbed Quorum. Using Quorum, the bank’s institutional clients would easily see financial data in a secure and transparent environment.
Besides, the bank also announced its own cryptocurrency JPM Coin for instant cross-border settlements across the globe. JPMorgan said that the bank would limit the cryptocurrency use only to institutional clients to facilitate billions-of-dollars of cross-border settlements on a daily basis.