Mizuho Bank Dealt Blow in Mt Gox Lawsuit Update

A US judge largely denied a push by Mizuho Bank last week to dismiss charges filed against it in a class action suit tied to the collapse of Mt Gox.

Aug 29, 2016 at 6:09 p.m. UTC
Updated Sep 11, 2021 at 12:28 p.m. UTC

A US judge largely denied a bid last week by Mizuho Bank to dismiss charges filed against it in a class action lawsuit tied to the collapse of defunct bitcoin exchange Mt Gox.

In a court order dated 26th August, US District Judge Gary Feinerman ruled Mizhuo should face charges related to unjust enrichment and fraudulent concealment in connection with the exchange's failure. Despite claims by the bank it had no formal business relationship with Mt Gox, Feinerman found the parties had a "transactional relationship".

The order is the latest to speak to the complex dealings between Mt Gox and Mizuho, including allegations that the bank continued to accept deposits from Mt Gox customers, even as it limited withdrawals, thereby putting additional operational pressure on the troubled startup.

Feinerman wrote:

"Mizuho stopped processing withdrawals but continued accepting wire transfer deposits (and reaping the associated fees) from Mt Gox users. It did so in an environment in which press reports discussed delays of, but not absolute bars to, withdrawals of fiat currency from Mt Gox's accounts."

While a number of charges will move forward, the bank did succeed in getting a charge for tortious interference dismissed.

Feinerman, however, indicated Mizuho is likely to move to have more charges dropped. The judge noted Mizuho "intends to raise foreign law at a later stage in the litigation", meaning that the bank may seek to invoke Japanese regulations.

The case is one of several legal efforts to emerge in the wake of the Mt Gox collapse, which fell apart after months of growing withdrawal problems and criticisms about its long-term viability.

CEO Mark Karpeles was later arrested by authorities in Japan and charged with embezzlement. He was released from custody last month.

The full court order can be found below:

Image via Shutterstock

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