Former MtGox customer drops claims against Mizuho

Maria Nikolova

Anthony Motto, who had accused the bank of tortious interference with contract, unjust enrichment, and fraudulent concealment, dismissed his individual and class claims against Mizuho Bank without prejudice.

Anthony Motto, a former customer of ill-fated Bitcoin exchange MtGox has dropped his claims against Mizuho Bank, Ltd., which he had accused of leading him and other depositors into a trap that left them without access to the money they invested in MtGox.

The brief note, filed with the Illinois Northern District Court on August 10, 2018, states:


PLEASE TAKE NOTICE that, pursuant to Rule 41(a) of the Federal Rules of Civil Procedure and the stipulation of the Parties, Plaintiff Anthony Motto hereby dismisses his individual and class claims against Defendant Mizuho Bank, Ltd. without prejudice and with each Party to bear its own costs”.

The dismissal happens about two months after Judge Feinerman issued a Memorandum Opinion and Order, denying Anthony Motto’s request to certify a subclass of depositors who allegedly had their funds trapped after the demise of MtGox – the clients were allegedly free to deposit but not to withdraw their money.

The action, captioned Greene v. MtGox Inc. et al (1:14-cv-01437), was brought by Gregory Greene and Anthony Motto who have sought to hold Mizuho Bank, Ltd. and Mark Karpeles liable for financial losses arising from the demise of the Mt. Gox. The complaint brought three counts against Mizuho, all on behalf of Motto and the putative Deposit Subclass: tortious interference with contract; unjust enrichment; and fraudulent concealment.

The Deposit Subclass, which Motto had sought to certify, was defined as those members of the Mt. Gox class—itself defined as “all persons in the United States who had bitcoins or money stored with Mt. Gox on February 24, 2014”—“who deposited money into their Mt. Gox account through Mizuho Bank after the date when Mizuho Bank stopped processing withdrawals.”

Let’s recall that the case focuses on the period starting from June 2013. By late June 2013, Mizuho had stopped processing all international outbound wire transfer requests for Mt. Gox customers. Neither Mizuho nor Mt. Gox announced publicly that Mizuho had stopped processing those outbound wire transfer requests. Mizuho, however, continued to accept and receive international inbound wire transfers from Mt. Gox customers until Mt. Gox shut down in February 2014.

Anthony Motto opened an account with Mt. Gox in mid-January 2014. Approximately a month later, and days before Mt. Gox stopped operations, Motto wired $1,000 in fiat currency from a JPMorgan Chase Bank account he controlled – owned by his company, Highline Technologies – to Mt. Gox’s account at Mizuho.

Importantly, at the time he wired the money, Motto was aware of difficulties, including delays, in Mt. Gox’s processing of withdrawal requests. Motto testified, however, that he was not “overly concerned” about those problems. As Motto explained, had he decided to make a withdrawal, he “would have withdrawn bitcoin” rather than trying to “turn” his investment “back into U.S. dollars”; a withdrawal of bitcoin, as opposed to a withdrawal of fiat currency, would not have required services of a bank like Mizuho. When asked whether his decision to invest in bitcoin on Mt. Gox would have been impacted by learning that Mizuho was no longer processing fiat currency withdrawal requests, Motto testified that he “would have worked another way to get funds into the Mt. Gox exchange.”

According to the Judge, Motto’s adequacy as a class representative founders on his being subject to particular defenses not applicable to the Deposit Subclass as a whole. Motto’s deposition testimony that he would have found a way to invest in bitcoin on the Mt. Gox exchange even had he known that Mizuho stopped processing outbound wire transfers – and that had he sought to withdraw his investment from the exchange, he would have done so in bitcoin, not in fiat currency – would provide Mizuho with serious grounds to attack and defeat his claims.

There are other similar cases against Mizuho launched by former MtGox customers in the US. One example is the action brought by Joseph Lack at the California Central District Court.

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