Cryptocurrencies appear to be earning their keep not only in the financial industry, but also in the legal arena. Recently, a federal judge has decided that a class-action lawsuit brought on by cryptocurrency purchasers against Chase bank is legit and is allowing the suit to move forward.
Chase Is in for a Serious Fight
The class-action suit says that Chase bank threw “surprise fees” at all its clients who may have purchased bitcoin or other digital assets in 2018. Chase bank treated these purchases as cash advances. A federal judge in lower Manhattan has decided that this was illegal on the company’s part.
The bank, on the other hand, argues that cryptocurrencies are a “form of electronic cash, and thus its treatment of the purchases was correct.” However, Judge Katherine Failla has explained that cash needs to be a form of “government-issued currency,” which doesn’t include cryptocurrency units. Thus, Chase took the wrong approach towards charging customers and believes those filing the suit have a strong case against the banking institution.
We have witnessed several class-action suits involving cryptocurrencies as of late. The first was brought on by Michael Terpin and several AT&T customers who allege they were the victims of SIM-swaps after employees of the cell phone and internet provider were potentially bribed to offer their private data to hackers. From there, cyberattacks took place through their phones that saw many customers lose their cryptocurrency holdings overnight. Terpin’s losses, according to the lawsuit, were well into the millions, and the suit against AT&T is for approximately $224 million.
The company states it did nothing wrong and is planning to fight the allegations tooth and nail.
Another class-action suit moving forward is one against French crypto entrepreneur Mark Karpeles, who at one time, was the chief executive of the doomed bitcoin exchange Mt. Gox in Japan. Instigators of the suit say that Karpeles did not do enough to keep their money protected when the exchange fell victim to a hack that saw nearly half-a-billion USD in bitcoin units disappear overnight. To this day, not all the stolen funds have been recovered.
Crypto Has Grown in Recognition and Stature
The lawsuit states that Karpeles likely knew about the online vulnerabilities the exchange was suffering from and did nothing to remedy them. Karpeles has argued that the lawsuit has no merit given his status as a French citizen. Thus, he states, the United States holds no jurisdiction while a federal judge in Philadelphia sees this differently.
In many ways, these lawsuits, while tedious and negative, provide crypto enthusiasts with the hope that federal governments now see crypto in a whole new light: legit investments that are to be treated in the same manner as cash and precious metals. The fact that so many federal judges could stand with those issuing the suits mentioned is a very positive sign.