One of the most important banks in the world and in the United States, JP Morgan Chase, is facing a lawsuit over cryptocurrency purchase charges. One of the bank’s customers has taken the bank to the court once he discovered that the bank was treating his cryptocurrency purchases as cash advance.
Legal Problems for JP Morgan
According to Fortune, JP Morgan was sued by Brady Tucker, a credit card holder form Idaho, for charging high interest rates and fees when purchasing cryptocurrencies like Bitcoin or Ethereum. Apparently, the bank has charged 30 percent a year and other additional fees.
Mr Tucker commented about that:
“Chase silently smacked them with instant cash advance fees, plus much higher interest rates than normal, and left them without any recourse.”
At the moment, Tucker is waiting a refund of all the fees, and $1 million more in damages. At the moment, the bank did not give a proper answer about this problem.
Tucker was buying cryptocurrencies using Coinbase and other cryptocurrency exchanges. According to him, he was not the only one affected by that, but there are many other customers that had the same problems when buying with credit cards.
Banks Against Crypto Purchases
This is not the first time that JP Morgan is involved in controversy regarding cryptocurrency purchases using credit cards. Back in February, three of the most important banks in the United States, decided to ban crypto purchases with credit cards. The main reason behind the measure is that they do not want to take the credit risk associated with the transaction.
In an interview with Bloomberg, Mary Jane, JP Morgan representative, explained that the bank does not want to take any risk regarding cryptocurrency transactions.
Cryptocurrency platform Coinbase informed its users:
“The MCC code for digital currency purchases was changed by a number of major credit card networks. The new code will allow banks and card issuers to charge additional fees.”
Other methods to purchase virtual currencies have not been affected and are still available. Bank transfers and ATM purchases are still normally functioning.
The banks that took this decision were Bank of America, JP Morgan, and Citigroup. In Australia, some banks announced that they were not going to ban cryptocurrency purchases using credit cards. One of the most important Australian banks, ANZ, explained:
“We monitor transactions for unusual behaviour to protect against potential fraud and in line with our regulatory responsibilities. We do not bank with businesses that operate as issuers, dealers or exchanges of digital or cryptocurrencies. These businesses are currently unregulated and therefore not within ANZ policy.”
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