Before bitcoin went on a parabolic growth spurt in the last few months of 2017, JPMorgan CEO, Jamie Dimon, said it was a bubble and that, eventually, it would end badly. He compared bitcoin to the 17th-century tulip bulb craze but did confirm that his daughter owned bitcoin. At the time, his company was already evaluating blockchain technology to reduce trading costs.
In January 2018, Dimon changed his tune and said he regretted calling bitcoin a fraud, but he was still concerned what governments would do when bitcoin goes mainstream. One month later, JPMorgan Chase decided to stop their customers from buying cryptocurrencies with a credit card. This was on the basis that they were making a speculative investment in a very volatile market, but they would still be able to use their debit cards to acquire cryptocurrencies.
JPMorgan was not alone in banning credit card purchases of cryptocurrencies, and some members of the crypto community saw this as the financial institutions biting back at bitcoin. There are two opposing views – one being that it’s sensible to protect consumers from highly volatile markets and another that the consumer has earned their credit rating and should be permitted to use their credit card as they please.
Reuters reported April 11, 2018, that JPMorgan has been slapped with a class action lawsuit for overcharging customers that bought crypto with their credit card. The plaintiff is Brady Tucker from Idaho, and he claims he wasn’t notified of the punitive charges for purchases he made from January 27 to February 2. Before filing the lawsuit, he had called JPMorgan Chase to dispute the fees, but they informed him that they were correct. The plaintiff claims he wasn’t notified in advance that he would incur the extra charges and, therefore, the defendant is in breach of the US Truth in Lending Act.
The plaintiff was charged less than $200 in fees and interest, but the lawsuit is for $1 million with thousands more expected to join the class action. San Diego-based law firm, Finkelstein & Krinsk LLP, are representing Mr. Tucker. From posts in this cryptocurrency Reddit thread, it looks like many more will be joining the class action lawsuit against JPMorgan Chase.
Financial analyst, smartphone app designer, technical writer, and crypto enthusiast. Blockchain verified graduate of MOOC 9, DFIN-511: Introduction to Digital Currencies, run by the University of Nicosia.