JP Morgan Chase faces a class-action lawsuit filed this week alleging the bank imposed punitive interest rates and fees on customers purchasing cryptocurrencies with credit cards. The suit marks an es
JP Morgan Chase faces a class-action lawsuit filed this week alleging the bank imposed punitive interest rates and fees on customers purchasing cryptocurrencies with credit cards. The suit marks an escalation of friction between traditional finance and the crypto sector.
The lawsuit centers on Brady Tucker, an Idaho resident who bought crypto through Coinbase using a Chase card. When he made those purchases, Chase hit them with interest rates exceeding 30 percent annually, plus cash-advance fees that other cards did not impose. Transactions to the same platform from other credit cards carried zero fees.
Tucker and other plaintiffs claim Chase reclassified cryptocurrency purchases in January 2018. The bank stopped treating these transactions as regular card purchases. Instead, Chase categorized them as cash advances, triggering much higher interest rates and new fees. Chase implemented this change without notifying its customers.
Court filings include an allegation that captures the change: "But beginning in January 2018, Chase decided to do something very different. Chase began treating all its customers' crypto purchases not as ordinary credit card 'Purchases'—as Chase had for years—but instead as 'Cash Advances' from Chase to the credit cardholder. When Chase implemented this change in late January 2018, Chase did so in total silence."
The alleged conduct violates the Truth in Lending Act (TILA), a 1968 federal law requiring banks to disclose loan terms and costs upfront.
Tucker's own damages are specific: $143.30 in fees and $20.61 in interest. He's seeking refunds of those charges plus damages totaling more than $1 million.
"Chase silently smacked them with instant-cash-advance fees, plus much higher interest rates than normal, and left them without any recourse," according to the suit's allegations about Chase's conduct toward its customers.
Chase spokesperson Mary Jane Rogers declined to comment on the lawsuit. She said the bank ceased processing cryptocurrency transactions on its credit cards by February.
Chase and other major banks have positioned themselves against crypto. Chief executive Jamie Dimon has called digital currencies a "Tulip Mania" for the 21st century. In February, Lloyds, Virgin Money, and Citigroup each prohibited credit card purchases of cryptocurrencies, pointing to market volatility as their reason.
In February, the crypto market cratered. Bitcoin descended from $20,000 to $6,000. Other coins also sank: IOTA, Bitcoin Cash, Cardano, and Ripple each fell between 47 and 59 percent.
