28 February 2017
Visit dh.com

Mizuho faces legal action over MT Gox collapse

17 March 2014  |  4105 views  |  0 bitcoins

The risks to banks of handling bitcoin-related business has moved centre-stage as Japan's Mizuho gets caught in the cross-hairs of the MT Gox collapse.

As the banker to wound-up bitcoin exchange MT Gox, Mizuho has been named in two of the numerous lawsuits being brought against the defunct operation in the US and Canada.

The US suit, brought by Illinois resident Gregory Greene, accuses Mizuho of aiding and abetting a fraud by holding fiat currency on account for Mt Gox. He accuses Mizuho of failing to segregate customer funds from MT Gox accounts and of continuing to provide banking services to the troubled firm even as it was evidently heading for collapse.

The Canadian filing names MT Gox, its owners Mark Karpeles and Jed McCaleb, and Mizuho as co-defendants in a $500 million lawsuit.

Banks have been wary of handling Bitcoin-related businesses in the absence of a proper legal and regulatory framework for the crypto-currency. Even if the suits against Mizuhos prove baseless, the reputational damage facing the Japanese bank and the legal costs of defending its actions in the case are likely to scare yet more banks away from the virtual currency world.

KeywordsLEGAL

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Singapore to tackle money laundering risks in bitcoin transactions

Singapore to tackle money laundering risks in bitcoin transactions

13 March 2014  |  5083 views  |  0 comments | 5 tweets | 3 linkedin
Bitcoin not a currency but has tech potential - Goldman Sachs

Bitcoin not a currency but has tech potential - Goldman Sachs

13 March 2014  |  7955 views  |  7 comments | 10 tweets | 5 linkedin
Bank of Ireland rejects bitcoin ATM firm's account request

Bank of Ireland rejects bitcoin ATM firm's account request

11 March 2014  |  4400 views  |  0 comments | 7 tweets | 7 linkedin
Forget bitcoin, let's ban hard cash urges US congressman

Forget bitcoin, let's ban hard cash urges US congressman

07 March 2014  |  6785 views  |  6 comments | 16 tweets | 15 linkedin
Mt. Gox files for bankruptcy protection; Yellen says Fed has no authority to regulate bitcoin

Mt. Gox files for bankruptcy protection; Yellen says Fed has no authority to regulate bitcoin

28 February 2014  |  5914 views  |  1 comments | 7 tweets | 10 linkedin
MT Gox goes up in smoke. Is this the end for bitcoin?

MT Gox goes up in smoke. Is this the end for bitcoin?

25 February 2014  |  6989 views  |  5 comments | 15 tweets | 10 linkedin
Standard Bank tests current account-linked bitcoin wallet

Standard Bank tests current account-linked bitcoin wallet

11 February 2014  |  15412 views  |  2 comments | 14 tweets | 13 linkedin
Wells Fargo and JPMorgan take contrasting stance on bitcoin

Wells Fargo and JPMorgan take contrasting stance on bitcoin

24 January 2014  |  11313 views  |  2 comments | 11 tweets | 14 linkedin
PayPal boss backs bitcoin, but not as a currency

PayPal boss backs bitcoin, but not as a currency

11 December 2013  |  5858 views  |  1 comments | 14 tweets | 12 linkedin
China bans banks from bitcoin transactions as Wall Street wades in

China bans banks from bitcoin transactions as Wall Street wades in

05 December 2013  |  6732 views  |  7 comments | 9 tweets | 6 linkedin
Capital One closes commemorative bitcoin coin maker's account

Capital One closes commemorative bitcoin coin maker's account

14 October 2013  |  10659 views  |  1 comments | 3 tweets | 2 linkedin
Dwolla kills support for bitcoin

Dwolla kills support for bitcoin

11 October 2013  |  15586 views  |  0 comments | 14 tweets | 6 linkedin
Tradehill suspends bitcoin trading in face of regulatory heat

Tradehill suspends bitcoin trading in face of regulatory heat

30 August 2013  |  7321 views  |  0 comments | 7 tweets | 1 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit BNP paribasVisit contisgroup.com

Top topics

Most viewed Most shared
BNY Mellon seeks blockchain experts for new emerging biz and tech teamBNY Mellon seeks blockchain experts for ne...
8367 views comments | 7 tweets | 4 linkedin
Starling releases Open API, talks up marketplace modelStarling releases Open API, talks up marke...
8117 views comments | 19 tweets | 18 linkedin
hands typing furiouslyBlockchain Technology
8105 views 1 | 18 tweets | 8 linkedin
Barclaycard strikes new wearable deals for contactless jewellery and watchesBarclaycard strikes new wearable deals for...
7453 views comments | 17 tweets | 15 linkedin
hands typing furiouslyKiller Corporate Banking Use Cases for Fin...
6966 views 2 | 12 tweets | 2 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job