The defunct Mt. Gox bitcoin exchange case is back in the mainstream news cycle, and this time, it’s back in the U.S.
A federal judge ruled yesterday (March 15) that the U.S. lawsuit that names Japan’s Mizuho Bank, part of Mizuho Financial Group, as being involved in the case by allegedly concealing problems that Mt. Gox had prior to its demise in 2014 can move forward. The bank argued that the case would be difficult to try in the U.S., but U.S. District Judge Gary Feinerman rejected the notion that the case belongs in Japan.
Mizuho’s involvement in the case is as the banking provider for Mt. Gox, which included handling deposits for U.S. customers. As a result, a class action lawsuit was filed in Feb. 2014 on behalf of the U.S. customers that were victims of Mt. Gox’s demise that left hundreds of millions worth of bitcoins missing. It was then that Mt. Gox filed for bankruptcy and its financial woes began to unravel and reveal themselves. Mt. Gox’s then-leader, Mark Karpeles, claimed that the digital currency exchange was hacked.
As for the case against the Japanese bank, the lawsuit alleges that it caused customers’ losses to grow by implementing withdrawal limits from the Mt. Gox accounts. While that action was going on, however, Mizuho still accepted deposits from the users, according to the lawsuit.
The lawsuit also asserts that customers filed complaints about the delays that were said to be because of technical problems. Mizuho allegedly knew those claims to be false but still “stood silent, while allowing the public to continue being duped,” according to the lawsuit.
“The court rightfully held that these victims are entitled to have their day in a U.S. court,” Jay Edelson, a lawyer for the Mt. Gox customers, told Reuters in an email. Neither Mizuho Bank nor its representatives have publicly commented on the matter, but in court filings, its legal team asserted that the bank had no role in the Mt. Gox collapse or the associated losses. It also claimed that the case should not be heard in the U.S. since the bitcoin exchange was located in Japan.
As for that last statement, the judge rejected such claims, saying that the bank accepted deposits from residents it knew were from the U.S. As a result, the lawsuit claims will continue to be heard.