Japan's Mizuho in U.S., Canada suits over Mt. Gox bitcoin losses

Sun Mar 16, 2014 1:29am EDT
 
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By Tom Hals and Amanda Becker

(Reuters) - Mizuho Bank, one of Japan's largest lenders, has became ensnared in North American legal fallout from Mt. Gox, once the world's biggest bitcoin exchange, which collapsed last month after losing nearly half a billion dollars worth of customers' digital currency.

Lawsuits in the United States and Canada represent a new legal front - and a deep-pocketed defendant - in the battle over Mt. Gox, which claims hackers stole huge amounts of its own and its customers' assets.

Mizuho, the core unit of Mizuho Financial Group Inc, Japan's second-biggest "megabank" by assets, was added as a defendant on Friday to an existing U.S. lawsuit against Mt. Gox for allegedly aiding in a fraud by providing banking services to the exchange.

Also on Friday, Mizuho was named in a class-action lawsuit in Canada against Mt. Gox, alleging a lengthy security breach at Mt. Gox resulted in "the pilfering of millions of dollars' worth of its users' bitcoins.

A Mizuho spokeswoman in Tokyo declined comment on Sunday on the lawsuits, filed in Chicago federal court and the Ontario Superior Court of Justice.

Tokyo-based Mt. Gox closed its virtual doors on February 25 and three days later filed for Chapter 11-style bankruptcy protection with a Japanese court.

CUSTOMERS SUSPECT FRAUD

The company said it had likely lost all 750,000 customer bitcoins it was holding, as well as 100,000 of its own and 2.8 billion yen in cash. That represents $567 million of vanished assets at current market prices, as well as about 7 percent of the bitcoins in circulation.   Continued...

 
Some of Bitcoin enthusiast Mike Caldwell's coins in this photo illustration at his office in Sandy, Utah, September 17, 2013. REUTERS/Jim Urquhart