Mt Gox exchange client sues Japanese bank Mizuho

According to local sources, the Japanese financial institution Mizuho Bank is accused of defrauding the deposits of clients of the Mt Gox exchange who hoped to withdraw their funds after the collapse of the exchange.

According to plaintiff Joseph Lack, the bank stopped paying out funds to clients of the Mt Gox exchange, but continued to accept deposits. Just before the collapse of the exchange, Mt Gox CEO Mark Karpeles for some reason decided to leave the bank account open, and Mizuho Bank accepted funds into this account, knowing full well that the exchange was ruined.

In January 2014, Joseph Lack transferred $40,000 to Mt Gox's account at Mizuho Bank, and the bank accepted these funds. Mt Gox went out of business a month later. Therefore, Lack decided to subpoena Karpeles and representatives of Mizuho Bank, because he believes that both parties should have informed clients about the problems of the exchange. Lack also says Mizuho Bank committed “fraud” when it accepted but did not release user funds by charging transaction fees.

Mizuho Bank denies the allegations and has sought to have the lawsuit thrown out in court. However, the California court sided with Lack and did not grant the motion to dismiss the lawsuit. Mizuho Bank lawyers explain why the bank continued to accept customer deposits.

“Accepting bank transfers is a passive transaction, that is, the transfer of information electronically from a machine at one bank to a machine at another. Lack did not contact the bank directly,” explains Mizuho Bank representatives.

The plaintiff, however, believes that the bank should not have silently accepted deposits knowing about the problem, so it is demanding damages from the financial institution. The case of Joseph Lack v. Mizuho Bank will be tried in California. Representatives of Mizuho Bank believe that the bank did not commit any violations, and the actions that are the subject of the dispute occurred accidentally and not intentionally.