US judge paves way for lawsuit against Mizuho over Mt Gox losses

US judge paves way for lawsuit against Mizuho over Mt Gox losses

A US judge has given the go-ahead to a class action lawsuit against Mizuho Bank over the Japanese giant's relationship with failed bitcoin exchange Mt Gox.

US District Judge Gary Feinerman has rejected Mizuho's argument that the case belongs in Japan, paving the way for the class action on behalf of American customers of Mt Gox, according to Reuters.

Mt Gox filed for bankruptcy protection in Japan in February 2014 and the US one month later after losing 850,000 bitcoins - worth more than $500 million at top-of-the-market prices. Karpeles blamed the losses on a software bug in the blockchain that let hackers plunder accounts.

The same month the suit against Mizuho - which handled all Mt Gox deposits for US customers - was filed, accusing the bank 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.

According to the suit, when customers who complained about withdrawal delays were told by Mt Gox that they were due to technical problems, Mizuho "stood silent while allowing the public to continue being duped," despite knowing the truth.

Comments: (0)

Featured Job
All Jobs »