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Barclays Quash Crypto Trading Desk Rumour But Monitor Developments

Barclays bank has confirmed that it has no plans to set up a cryptocurrency trading desk as previously rumored.

British banking giant Barclays appears to be the latest to enter the blockchain arena, with Barclays UK recently announcing a new ventures unit to study “disruptive technology”. However, despite a report from CoinDesk earlier this month indicating that Barclays was monitoring client responses to the possibility of opening a trading desk for the cryptocurrency, the bank doesn’t appear ready to take the next step, and still seems to be monitoring the space.

Barclays’ spokesman Andrew Smith said in an emailed statement last month:

“We constantly monitor developments in the digital currency space and will continue to have a dialog with our clients on their needs and intentions in this market,”

In fact, Barclays CEO Jes Stately regards a move towards cryptocurrency as a “real challenge.” UK media outlet, Financial News, reports that the comments were made in response to shareholders’ questions, during the banks annual meeting. He commented:

“…on the one hand, there is the innovative side of it and wanting to stay in the forefront of technology’s improvement in finance… On the other side of it, there is the possibility of cryptocurrencies being used for activities that the bank wants to have no part of.”

It is exactly these activities the governments around the world are currently legislating against in order to make the cryptocurrency space both safe and fit for purpose. Stately says that the bank is looking into cryptocurrency related business, but sees the regulatory and compliance issues as something which needs addressing.

Other major banks such as JPMorgan and Goldman Sachs have expresses concerns and strong views in the past and have often been scathing about bitcoin and other digital currencies. There are, however, ex-bank executives moving towards the new financial ktechnology.  Ex-chief of JPMorgan’s global energy trading desk, Daniel Masters, has recently suggested that cryptocurrencies could no longer be ignored by central banks and governments, adding that both the story and the technology is there and it is “convincing.”

Image Courtesy:  https://pixabay.com/en/bank-money-finance-shares-save-2907728/  James Qube

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JPMorgan Chase Faces $1 Million Class Action Over Crypto Fees

A lawsuit has been filed on JPMorgan Chase and Co in a Manhattan Federal court accusing the bank of overcharging clients who purchased cryptocurrencies using their credit cards.

In January, JPMorgan Chase prohibited the buying of cryptocurrencies using credit cards and levied extra charges, treating the purchases as cash advances.

Customer and Idaho resident Brady Tucker has filed a suit against the investment banker for overcharging him for fees and interest for two payments of USD 143.30 and USD 20.61 for cryptocurrency transactions. It suggests that possibly thousands of other customers have also been overcharged. The investor bought USD 2,301 worth of cryptocurrencies between 15 January and 2 February and maintains that he called Chase’s customer service line to dispute the charges but the bank refused to move them.

A spokesperson for the bank, Mary Jane Rodgers, wouldn’t comment on the lawsuit but pointed out that the reason for halting credit card crypto purchases was due to credit risk.  JPMorgan’s CEO, Jamie Dimon, has previously called cryptocurrency a “fraud”, saying that he’d fire any employee “stupid” enough to trade in it.

Attorneys for Tucker, Finkelstein & Krinsk LLP, a San Diego-based law firm, suggest that customers did not receive fair notice regarding the banks proposed changes, incurring “millions of dollars of cash advance fees and sky-high interest charges on each and every crypto purchase”.

The lawyers are seeking the fees returned and damages “in an aggregate amount of USD 1 million” in a class action hearing. Although the size of the class has yet to be established, it could be as many of “hundreds or thousands of members”. They accuse JPMorgan Chase of violating the US Truth in Lending Act, which requires credit card issuers to notify customers of significant changes in terms.

Several banks in the US and UK, including Lloyds Banking Group Plc, Virgin Money and Citigroup banned the use of credit cards to purchase cryptocurrencies earlier this year after Bitcoin plunged from about USD 20,000 to USD 13,000.

 

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