In an interesting development that could have far-reaching implications for the cryptocurrency domain, a court case between plaintiffs (Brady Tucker, Ryan Hilton, and Stanton Smith) and Chase Bank was decided in favor of the former. According to the complaint filed by the plaintiffs, their crypto purchases from 2017 to 2018 via Chase Bank credit card were classified as “purchases” under the terms and conditions of the credit card agreement.
However, between January 23 and February 2, 2018, the bank started classifying the purchases of cryptocurrencies by the complainants as “cash advances.” This resulted in higher interest rates as cash advances attract higher interest than purchases. In their complaint, plaintiffs argued that Bank had violated their contract agreement, and in response to this allegation, Chase counter-argued that the purchase of the cryptocurrencies are cash-like transactions and hence they must be placed under the cash advances category in the agreement.
The primary issue that the court had to settle that whether Bitcoin transactions can be considered cash-like transactions or not. In case of any ambiguity, the court relies on the procedure to find the common meaning of the term used in the agreement and then decide which party has been right and which one is guilty. In this particular case, the term cash became very important. According to the plaintiffs, they understood the meaning of cash as physical currency or any fiat currency issued by any central bank. The attorney of Chase Bank argued that cash means money, and money, in turn, means a medium that can be used to make the purchase or means of making the payment. This viewpoint is in stark contrast to the remarks made by Jamie Dimon, the Chief Executive Officer of JP Morgan, the parent bank of Chase Bank, who once called Bitcoin a fraud.
The court finally decided in favor of the plaintiffs by announcing that as cryptocurrencies don’t equip their holder with any legal right to have the fiat currency issued by any government or Central Bank, it cannot be considered as a cash-like transaction as argued by Chase Bank.
It seems things have come a long way in the crypto domain, and the change of stance adopted by the Chase bank from once calling Bitcoin a Fraud to now treating it as a cash-like transaction signifies a dramatic shift in its approach and the things to come in the future.
