Banking giant JPMorgan Chase has reached a settlement in a lawsuit over changes to the fees for purchasing digital currency on its credit cards, bringing an end to legal action over the matter.
The unannounced fee structure changes were introduced in 2018, which the plaintiffs said was a violation of its cardholder terms of service. Chase bank customers Brady Tucker, Ryan Hilton, and Stanton Smith brought the action after the bank implemented the new fee structure without providing any advanced warnings to its customers.
Notably, Chase applied cash advance fees for digital currency purchases, a position it has previously defended. In a prior hearing, Chase argued digital currency purchases could be characterized as "cash-like transactions," and as a result, the fee change was not a breach of its terms.
In August, a judge upheld the arguments of the plaintiffs in demonstrating the definition of "cash-like" as referring specifically to instruments tied directly to fiat currency, including money orders, cash and traveler's cheques.
Chase also pointed to a change in merchant category code at Coinbase, which switched from "purchases" to "cash advances," thereby shifting the applicable fee structures to digital currency transactions on Chase cards.
The plaintiffs claim to represent a large number of affected Chase customers, and are seeking full refunds of all charges it alleges have been wrongly applied. This is alongside a claim for $1 million in damages in connection with the charges.
The parties now have a further 75 days to consider their next move, before the plaintiffs will be able to apply for restoration of the action.
It comes at a time when JPMorgan is exploring blockchain technology in more depth. In the last month, the bank published a 74-page report on the state of the industry, concluding that there was still some time to go before the technology reached mainstream adoption.
Nevertheless, the bank has been among the quickest of the mainstream institutions to get behind stablecoins. Its JPM Coin was trialed as early as February 2019, becoming the first U.S. commercial bank to successfully demonstrate its stablecoin in practice.
The settlement for an undisclosed amount brings the case to its conclusion without an admission or denial of wrongdoing on behalf of the bank.
The unannounced fee structure changes were introduced in 2018, which the plaintiffs said was a violation of its cardholder terms of service. Chase bank customers Brady Tucker, Ryan Hilton, and Stanton Smith brought the action after the bank implemented the new fee structure without providing any advanced warnings to its customers.
Notably, Chase applied cash advance fees for digital currency purchases, a position it has previously defended. In a prior hearing, Chase argued digital currency purchases could be characterized as "cash-like transactions," and as a result, the fee change was not a breach of its terms.
In August, a judge upheld the arguments of the plaintiffs in demonstrating the definition of "cash-like" as referring specifically to instruments tied directly to fiat currency, including money orders, cash and traveler's cheques.
Chase also pointed to a change in merchant category code at Coinbase, which switched from "purchases" to "cash advances," thereby shifting the applicable fee structures to digital currency transactions on Chase cards.
The plaintiffs claim to represent a large number of affected Chase customers, and are seeking full refunds of all charges it alleges have been wrongly applied. This is alongside a claim for $1 million in damages in connection with the charges.
The parties now have a further 75 days to consider their next move, before the plaintiffs will be able to apply for restoration of the action.
It comes at a time when JPMorgan is exploring blockchain technology in more depth. In the last month, the bank published a 74-page report on the state of the industry, concluding that there was still some time to go before the technology reached mainstream adoption.
Nevertheless, the bank has been among the quickest of the mainstream institutions to get behind stablecoins. Its JPM Coin was trialed as early as February 2019, becoming the first U.S. commercial bank to successfully demonstrate its stablecoin in practice.
The settlement for an undisclosed amount brings the case to its conclusion without an admission or denial of wrongdoing on behalf of the bank.