Manhattan Federal Judge Will Decide Whether Cryptocurrencies Are Cash Or Not
A federal judge in Manhattan will have to take a decision on whether cryptocurrencies are considered cash or not. This would have a very important effect in the space since the regulatory framework around virtual currencies is still not clear.
Are Cryptocurrencies Cash?
Chase Bank, a commercial banking subsidiary of JP Morgan Chase, said that virtual currencies are like cash because it is a medium of exchange. According to Chase, the only difference with cryptos is that they are digital. Meanwhile, customers are arguing that virtual currencies are goods and not cash.
According to CCN, back in 2018, Chase customers sued the bank. Chase started to charge fees after it stopped letting customers purchase digital currencies with credit cards. At that time, the company began treating them as cash. Additionally, the bank did not refund the extra fees charged when customers complained about it.
Brady Tucker, the lead plaintiff in this lawsuit, said that he had to pay $143.3 in fees and also $20.61 in surprise interest charges for a few virtual currency transactions that he performed at the beginning of 2018.
Tucker says that Chase Bank violated the Truth in Lending Act that protects users from unfair practices undertaken by credit cards. It is worth mentioning that the law says that financial institutions have to inform customers of changes in their terms of service.
Early in 2018, several banks decided to ban crypto purchases with credit cards, including Citigroup and Bank of America. Something similar did Wells Fargo in June 2018 when it did not allow customers to buy virtual currencies using credit cards because it was “too risky” for the bank. Nonetheless, Wells Fargo admitted that it scammed customers for over 15 years by opening unauthorized bank accounts and credit card services for its users.
Many other banks have been obliged to pay fees after violating different rules and harming customers.