18 December 2017
visit www.avoka.com

Mizuho faces legal action over MT Gox collapse

17 March 2014  |  4690 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  |  5753 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  |  10701 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  |  4900 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  |  7690 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  |  6464 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  |  7617 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  |  16448 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  |  14711 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  |  6215 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  |  8231 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  |  11084 views  |  1 comments | 3 tweets | 2 linkedin
Dwolla kills support for bitcoin

Dwolla kills support for bitcoin

11 October 2013  |  16032 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  |  7889 views  |  0 comments | 7 tweets | 1 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.response.ncr.comvisit www.thomsonreuters.infovisit www.niceactimize.com

Top topics

Most viewed Most shared
satelliteRipple completes XRP Lockup
11139 views comments | 3 tweets | 2 linkedin
Banks tap Ethereum smart contracts for MiFID II complianceBanks tap Ethereum smart contracts for MiF...
9706 views comments | 20 tweets | 21 linkedin
Banks and fintech startups join forces on blockchain-based supply chain pilotBanks and fintech startups join forces on...
7679 views comments | 19 tweets | 22 linkedin
Nordea takes Open APIs into live productionNordea takes Open APIs into live productio...
7259 views comments | 6 tweets | 26 linkedin
Digital banking startup Loot secures £2.2 million seed roundDigital banking startup Loot secures £...
7182 views comments | 5 tweets | 11 linkedin

Featured job

Competitive base, commission, benefits
London, UK

Find your next job