Mizuho Bank Hit with US, Canadian Lawsuits over Mt. Gox

Mizuho Bank, one of the largest lenders in Japan, has been named in two lawsuits in the aftermath of the Mt. Gox collapse.

Japan’s second largest bank by assets, Mizuho was named in an existing US lawsuit against Mt. Gox Friday. The suit was filed in a Chicago federal court by an Illinois resident who claims he lost $25,000 in the Mt. Gox meltdown. According to the complaint, Mizuho knew of Mt. Gox’s fraud and did not segregate funds that belonged to the exchange from those of its customers. Additionally, the bank is said to have continued to provide banking services that inflated losses for customers.

“Mizuho profited from the fraud,” the complaint said.

The bank was also named in a class action lawsuit filed in the Ontario Superior Court of Justice. The Canadian plaintiffs allege that all non-Bitcoin currency received by Mt. Gox from its users was held in accounts at Mizuho.

The proposed class action, which targets Mt. Gox owners Mark Karpeles and Jed McCaleb as well as Mizuho, will seek US$500 million in compensation for Canadians.

Toronto lawyer Ted Charney said that Canadian Mt. Gox users lost millions of dollars in the Mt. Gox collapse. “We’re never going to find out what’s going on unless we start a lawsuit because it’s the only way we’re going to get access to the records,” Charney told the Financial Post.

The bank had been trying to cut its ties with Mt. Gox as early as January. The Wall Street Journal published a conversation between bank officials and Karpeles, in which the bank persuaded him to close the account voluntarily. Karpeles said Mt. Gox was unwilling to cooperate.

Tokyo-based Mt. Gox, once the world’s largest Bitcoin exchange, filed for bankruptcy in Japan at the end of February after it admitted to losing more than US$500 million in bitcoins. Last week, the troubled exchange filed for US Chapter 15 bankruptcy, shielding it from lawsuits in US courts.

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