Buying crypto on credit isn’t necessarily a cash advance

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Judge Katherine Polk Failla in the southern borough of New York has ruled that purchasing cryptocurrency with a Chase Bank credit card does not necessarily count as a cash advance under Chase’s contract.

According to opinion and order document On Aug. 1, Judge Failla denied Chase’s motion to dismiss a number of plaintiff’s complaints about the bank charging a user cash advance fees for purchasing cryptocurrency using a Chase credit card.

Plaintiffs are Brady Tucker, Ryan Hilton and Stanton Smith, who filed a class action lawsuit against banking giant Chase.

In the document, Failla summarizes her class action lawsuit as follows:

“This claim – in fact, the entire claim by plaintiffs – is based on the argument that the acquisition of cryptocurrency could not be classified as a cash advance within the meaning of the contracts. […] Chase disagrees, claiming that the acquisition of cryptocurrencies is a “cash-like transaction” according to the contracts and therefore cash advances. The dispute between the parties thus amounts to a disagreement about the correct interpretation of the term ‘cash-like transaction’. ”

The reason a number of Chase’s dismissal motions were not going through is because Judge Failla believes that plaintiffs interpreted the term “cash-like transaction” appropriately in the context of Chase’s contract.

As Failla also explains in the document, plaintiffs interpret the word cash only to refer to fiat money and cash-like as referring only to legally recognized claims on cash – such as checks, money orders and wire transfers, and specifically not cryptocurrency. The defendants, on the other hand, believe that the term cash-like transactions applies to all means of payment, whether in cryptocurrency or otherwise.

In particular, Judge Failla has not sided with the plaintiffs in declaring that their interpretation is correct. Rather, Failla has merely determined that her interpretation is plausible enough to proceed with her class action lawsuit. Failla wrote:

“At this point in the process, however, it doesn’t matter whether Chase’s interpretation of ‘cash-like transactions’ is more reasonable than that of the plaintiffs.’ […] Since the plaintiffs have identified a reasonable interpretation of “cash-like transactions” that would preclude the purchase of cryptocurrency, the claim to breach of contract outlives the request for rejection. “

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