JP Morgan Chase & Co. is in court facing a lawsuit accusing the bank of usury that comes from a customer who used their credit cards to buy cryptocurrencies from exchanges such as Coinbase.
The client files a federal lawsuit against Morgan Chase
Fortune reports that the lawsuit was filed on Tuesday, April 10 in Manhattan federal court by Brady Tucker. Tucker, who owns a Chase credit card in Idaho, accuses Morgan Chase of treating his purchases of cryptocurrencies as cash advances that began in January without warning.
Cash advances carry instant charges and higher interest rates than normal purchases. Tucker, who says he always paid his outstanding balance to the bank before the end of the billing cycle, incurred interest rates of up to 30% plus additional fees.
Looking for class-action status for the claim that calls for the return of all fees plus one million dollars in damages Tucker was quoted as saying:
“Chase silently hit them with instant cash advance rates, much higher interest rates than normal, and left them without any recourse.”
The main credit card issuers announced earlier this year that they would apply cash advance rates and interest rates on purchases of cryptocurrencies.
Cryptocurrency Cash, Property, Securities or what?
First notified on February 8 Mastercard and Visa informed customers that in addition to the normal 4% credit card fees charged for using their cards in exchanges such as Coinbase, there would be an additional cash advance fee of 5% more interest rates that start at the time of purchase, not at the end of a billing cycle as a normal point-of-sale transaction.
This equates to almost 10% success right above any purchase of cryptocurrencies made plus interest that can reach up to 30% as is the case in Mr. Tucker’s lawsuit.
Not many operators are willing to get a 10% loss from the top, but at the moment there are not many alternatives to buy cryptocurrencies.
The Brady Tucker lawsuit revives the question of how cryptocurrencies should be classified. The IRS has maintained that Bitcoin and its type are taxable property, not currency. While the various regulatory agencies of the US. They are still trying to establish how to deal with digital assets.
The SEC, for example, has made it clear that they would like to see cryptocurrencies treated as securities, placing them in the same category as stocks and bonds and, therefore, subject to the same regulatory framework.
The representatives of JP Morgan Chase have refused to comment on the impending lawsuit.