America’s largest bank, JPMorgan Chase, has settled a $1 million class-action lawsuit over unannounced changes to its credit cards’ fee schedule for crypto purchases.
The sixth-largest bank worldwide, JPMorgan Chase Bank, has settled a lawsuit over unannounced changes made to the fee structure applied to cryptocurrency purchases made using its credit cards in 2018. The details of the settlement have not been disclosed.
Plaintiffs Brady Tucker, Ryan Hilton, and Stanton Smith accused Chase Bank of violating its cardholder terms of service during January 2018.
The trio asserts that Chase applied the fee structure for cash advances to cryptocurrency purchases made with Chase’s credit cards for 10 days without providing any warning as to the change.
Chase changes fee structure for crypto purchases without warning
During a previous hearing, Chase sought to argue that cryptocurrency purchases comprise “cash-like transactions” as per its terms of service, and as such, it did not breach its contract with cardholders.
However, in August, Judge Failla ruled that the trio had demonstrated a credible interpretation of “cash-like” as exclusively referring to financial instruments tied to fiat currency — such as traveler’s check and money orders, and cash.
Chase also claimed that the adjusted fee schedule was the result of crypto exchange Coinbase changing its merchant category code from “purchases” to “cash advances.”
Plaintiffs sought $1 million in statutory damages
Tucker originally filed the suit during April 2018. After the bank sought dismissal of the case in July 2018, Tucker filed an amended complaint alongside Smith and Hilton.
Claiming to represent a class of up potentially thousands of Chase Bank cardholders impacted by the unannounced changes, the plaintiffs sought full refunds of all charges wrongfully incurred in addition to $1 million in statutory damages.
All parties now have 75 days to submit their stipulations of settlement, otherwise, the plaintiffs can apply for the action to be restored.
JPMorgan Chase targets burgeoning stablecoin sector
Last month, JPMorgan Chase published a 74-page report examining the development and state of the blockchain industry.
While acknowledging that distributed ledger technologies had seen significant adoption for niche financial applications such as stock exchanges, the report concluded that mainstream blockchain adoption is still many years away.
Despite its predictions, America’s largest bank has moved quickly to capitalize on the recent boom in stablecoin interest. During February 2019, JPMorgan Chase became the first U.S. bank to successfully test a stablecoin representing fiat currency after trialing its ‘JPM Coin’.