crime

Mizuho added to class-action suits against Mt Gox in U.S., Canada

14 Comments
By Tom Hals and Amanda Becker

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14 Comments
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I don't really know the law but I can't see how a bank could be legally responsible for it's any and all bad clients they might have

1 ( +5 / -4 )

I also wonder how it could be the banks fault or how they should be on the hook for speculators losing deposits made to a non-bank / non-regulated exchange that they knew was non-licensed, non-regulated, and NOT a bank.

3 ( +4 / -1 )

Mizuho giving banking services to a fraudulent company is the basis of the case against them, as it states in the article. Isn't reading fun?

2 ( +5 / -3 )

sf2k is correct, Mizuho knowingly worked with a corporation that was performing unregulated bank related business, knew Mt Gox had moved out of compliance over a month before the febuary meltdown and tried to have it voluntarily shut down.

but it only urged the company to do so- Mizuho did not force the situation- thus allowing the fraud to continue- Mizuho ends up continuing to collect fees and it's assets are protected. while customers and Mt Gox are not.

So yes if proven Mizuho is liable

1 ( +4 / -3 )

bet mizuho will really welcome the gaijin customers now,,, with a pair of brass knuckles!

0 ( +0 / -0 )

sf2kMar. 17, 2014 - 12:09PM JST Mizuho giving banking services to a fraudulent company is the basis of the case against them, as it states in the article. Isn't reading fun?

Actually I think it is a little more complex than that, and has three parts: "The U.S. suit:

accuses Mizuho of knowing of Mt Gox’s fraud,

of not segregating funds that belong to Mt Gox from those of its customers and

of continuing to provide banking services that inflated losses for bitcoin customers."

Part 1 is going to be a hard sell. Proving that someone did or did not know something is always hard. This is a civil suit, so the level of proof required is going to be less than in a criminal case, but unless they have something like communications showing that Mizuho knew that Mt Gox was up to something then they've got no chance.

Part 2 is just ridiculous. Once the money enters Mt Gox's account it was up to Mt Gox to manage it correctly. The bank is not supposed to be leaning over their clients' shoulders and saying, "Umm... shouldn't that money be in a trust?".

Part 3 is where I start laughing. In essence they're trying to blame Mizuho because, even after things started getting shaky, THEY still wanted to buy bitcoins. I bet a ton of them rushed to buy bitcoins the moment the first word leaked about a crash because they thought it might be a fake and they gambled that if it was a false alarm they could make a fortune. They took the gamble, and now they want the bank to pay their debts because they lost.... ridiculous, utterly ridiculous.

2 ( +6 / -4 )

Sf2k, did Mizuho provide services to a fraudulent company?

When MtGox opened the account, was it not just a trading card related company, dealing with Magic, The Gathering cards? Or did it make clear in its bank account application that it was dealing in e-currency? I don't know this. Do you?

What I did read is that at some point, Mizuho realized what MtGox had morphed into and it went about shutting them down.

2 ( +2 / -0 )

taj Mar. 17, 2014 - 03:18PM JST When MtGox opened the account, was it not just a trading card related company, dealing with Magic, The Gathering cards? Or did it make clear in its bank account application that it was dealing in e-currency? I don't know this. Do you?

I don't think this is relevant really. E-currency isn't illegal and is just another commodity traded on the internet. E-bay doesn't get sued because some guy sells something that most people consider to be worthless. It is a willing seller-willing buyer situation. As long as Mizuho didn't knowingly facilitate the sale of drug or something else illegal then what MtGox was selling is irrelevant.

1 ( +4 / -3 )

@taj, I don't know about the situation when they first opened the account but Mizuho must have known for a long time that they were dealing with a bitcoin exchange, because they were doing huge amounts of remittances for them. I heard (can't confirm it's true) that at one point half of all Mizuho's international remittances were for Gox. But running a bitcoin exchange isn't illegal, and the FSA seem to have said quite clearly, both before and after the bankruptcy, that Gox didn't need a banking license to do what they were doing. Whether or not we think that's the right position for the FSA to take, it doesn't seem unreasonable for Mizuho to take their word for it.

Based on the recording that got leaked it seems like the eventual attempt to shut the account down was prompted by: 1) US banks giving them trouble over their remittances. 2) A minor money-laundering thread that came out of the Silk Road investigation, which involved people with accounts at Gox and resulted in a high-profile arrest.

1 ( +1 / -0 )

Thanks Frungy and Edmund. I agree.

sf2k

Mizuho giving banking services to a fraudulent company is the basis of the case against them, as it states in the article. Isn't reading fun?

the basis of the case => the basis of a pending law suit

Having a civil suit brought against you isn't proof that something is true or not or that you did something naughty or not. If it was the basis of a successful case, you'd have an argument and I'd be less inclined to take offence at your snark.

1 ( +1 / -0 )

Mt. Gox is a dog, but hey people who signed up and kept money with them - take a look at yourselves for your own portion of the blame. It's not like Mt. Gox was MF Global - My. Gox was regulated by nothing, so of course there was a risk and the risk came to fruition.

I'm no Mizuho fan at all, but suggesting that the bank ought know which funds belong to Mt.Gox and which funds belong to all the risk-loving speculators who were buying into this anti-government digital currency is sheer craziness. No wonder these same people put so much into bitcoin that it mattered to them went Mt. Gox went under.

2 ( +2 / -0 )

Since Mt Gox doesn't have any assets which can be recovered, the lawyers will go after anyone who does. Mizuho is of course not responsible, but they will be made to pay anyway, as they will probably see a settlement being less expensive than defending themselves in court.

-2 ( +0 / -2 )

How many people actually lost money in this? What I mean if one person had one bitcoin then 700,000 people lost money, however, if one person had one thousand bitcoins each then only seven hundred people lost money in it.

Bitcoin was nothing more than Monopoly money and if it was not legal tender in any country then why are governments getting involved with this unless they are the ones who lost the Monopoly money.

As P. T. Barnum once said 'There is a sucker born every minute' and this just shows there were a few that were born.

1 ( +1 / -0 )

Bitcoin is a private enterprise play money without any government backing. I hope that the courts will not equate bitcoin as government backed currency. You play with funny money, you pay the price. Beware to the consumer.

2 ( +2 / -0 )

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