Two lawsuits against bankrupt bitcoin exchange Mt.Gox added Japanese “megabank” Mizuho as to their filings on Friday. According to both suits, one in the U.S. and the other in Canada, the lack of due diligence by the bank was an inherent part of the alleged three-year fraud at Mt.Gox. As Mt.Gox’s bank, Mizuho held most of the exchange’s fiat currency, collecting fees in the process.
Mizuho was named as a defendant in the U.S. case, opening the bank to at least some liability in the now-infamous loss of 800,000 BTC at the exchange. The suit claims that Mizuho was aware of at least some of the problems at Mt.Gox, and even threatened to close the account if Karpeles did not comply with their accounting rules. That lack of timely action by the bank, the suit alleges, inflated customer losses.
According to Reuters:
An unnamed Mizuho manager at Mizuho bank, in a recording leaked on the internet, asks Mark Karpeles, Mt. Gox’s 28-year-old French CEO, to close his firm’s account with the bank, citing compliance issues and moves by other banks to cut ties with the exchange. … Karpeles told the Mizuho official Mt. Gox was unwilling to cooperate.
Given that Mt.Gox appears to have very few assets left, and only around 2.8 billion yen ($27 million) in cash, going after Mizuho makes some sense for the plaintiffs. Assets belonging to Mt.Gox and CEO Mark Karpeles have already been frozen by U.S. courts in the case, although it remains unclear if such assets even exist.
Also named in the amended U.S. suit are Gonzague Gay-Bouchery, the “second in command” at Mt.Gox, and Jed McCaleb, the site’s founder and part owner.
The stakes are lower for Mizuho in the Canadian, as the bank was simply named in the class-action suit as Mt.Gox’s banking provider for all non-bitcoin currency.