Mizuho Bank recently found itself in a legal trouble after its association with defunct Bitcoin exchange Mt. Gox was recognized by a US court. The bank’s name surfaced in the notorious Bitcoin theft case when some of its victims claimed that their withdrawal requests was denied by the Japanese bank.
The Mt. Gox victims, on the grounds of denial of rightful requests by Mizuho, later filed a class action lawsuit against the bank. According to the lawsuit, Mizuho Bank intentionally wreaked Mt. Gox customers’ right to withdraw funds in the time of the notorious hack. It therefore makes the bank equally responsible for aggravating customers’ losses.
In its defense, Mizuho had claimed that the US Court doesn’t have jurisdiction over the case as the exchange in question was based out of Japan, and so is Mizuho Financial Group, the bank’s parent company. The presiding US District Judge Gary Feinerman has rejected the bank’s appeal, allowing the class action lawsuit to proceed.
The bank is also reported to have mentioned that Mt Gox customers can’t be considered as its customers. In response, the Judge in the court order rules that there was a transactional relationship between Mizuho and Mt Gox customers as they were allowed to send direct wire transfers to the bank account. He also states that the bank, due to its actions, will be facing charges related to unjust enrichment and fraudulent concealment resulting in losses to the public.
It is believed that Mizuho Bank had full knowledge about the trouble brewing in Mt Gox. But still, it continued to receive funds from customers, profiting from transaction fees associated with the deposits while limiting withdrawals.
The Mt Gox fiasco, resulting from gross mismanagement and multiple hacking attempts resulted in a loss of over 650,000 bitcoins. Recently, the Japanese authorities along with Payward group, Kraken’s parent company conducted a thorough investigation into the Mt Gox. A complete report is yet to be released. Kraken was also part of the process to distribute recovered bitcoin among the customers who were affected by the closure of Mt. Gox.
As the lawsuit is given a go-ahead, Mizuho Bank is expected to invoke Japanese laws in the latest stages of the proceedings.
Ref: CalvinAyre | Image: NewsBTC