Mizuho blames Mark Karpeles for damages related to MtGox transaction problems

Maria Nikolova

The Japanese bank has filed crossclaims against Mark Karpeles at the California Central District Court.

Less than a week after former customers of ill-fated Bitcoin exchange Mt. Gox managed to convince the Court that their claims about Mizuho Bank’s fraudulent concealment of information related to Mt. Gox’s client funds transactions are plausible, the Japanese bank has decided to put the blame for the damages on Mark Karpeles.

Earlier this week, Mizuho Bank filed crossclaims against the former President, CEO, and majority shareholder of Mt. Gox. The new claims are part of a case targeting Mizuho and Karpeles. The plaintiff – Joseph Lack, a former customer of the Exchange, alleges that Mizuho did not inform customers of MtGox about the transaction difficulties they might experience and thus created a trap, where they could put the money into MtGox’s account but could not withdraw anything.

Now, the Exchange seeks to put the blame on Karpeles. The crossclaims filed with the California Central District Court earlier this week seek to hold Karpeles accountable for the damages caused.

Mizuho alleges that Karpeles was aware that there were security “bugs” in the Mt. Gox system as early as 2011, and that he stole Mt. Gox users’ bitcoins, either by exploiting the security “bugs” or otherwise. Karpeles is said to have made numerous representations to the public and to Mt. Gox users that the withdrawal issues were only temporary and that user assets were safe. Karpeles also assured users through the Mt. Gox online Support Desk that any problems were being dealt with and that there was no cause for alarm.

According to Mizuho, if it had not been for Karpeles’s fraud, Mizuho would not have been sued by MtGox’s customers over the transactions issues, and would not have incurred any losses relating to this action. Karpeles is the actual and proximate cause of any damages suffered by Lack, the bank says.

Mizuho said Karpeles owed it a duty of reasonable care to avoid violating the bank’s rights or legally protected interests. Karpeles’ statements were, at a minimum, negligent and done without reasonable care for the truth or the consequences of these statements, according to the bank.

Mizuho argues that its damages were proximately caused by Karpeles’s false statements.

Mizuho denies all liability alleged against it by Joseph Lack. However, pursuant to Japanese law and/or other applicable law, in the event Mizuho is found liable in any respect, Mizuho is entitled to recover from Karpeles the proportion of the plaintiff’s alleged damages, the bank argues.

The case is captioned Joseph Lack v. Mizuho Bank, Ltd., et al (2:18-cv-00617).

Read this next

Digital Assets

Kraken acquires TradeStation’s cryptocurrency business

Kraken, the second-largest U.S.-based cryptocurrency exchange, has acquired the cryptocurrency arm of online brokerage TradeStation.

Retail FX

The Funded Trader is back? Traders report account closures

Prop trading firm The Funded Trader has updated its website with a few banners, nearly three weeks after it ceased all operations, with claims for a relaunch in the near future. However, there was no official statement on the relaunch on its website, Discord channel, or social media accounts yet.

Executive Moves

NAGA lures former Tickmill compliance exec Loukia Matsia

NAGA Group, a provider of brokerage services, cryptocurrency platform NAGAX and neo-banking app NAGA Pay, appointed Loukia Matsia as their new Head of Compliance and Anti-Money Laundering (AML).


Explore 2024’s Top Cryptocurrencies: BlockDAG Leads With 30,000x ROI Potential, Among Surge Predictions For Bitcoin And Ethereum

Navigating the vast ocean of cryptocurrencies might feel overwhelming for many investors, whether seasoned or newbies.

Tech and Fundamental, Technical Analysis

EURUSD Technical Analysis Report 18 April, 2024

EURUSD currency pair can be expected to fall further toward the next support level 1.0600 (which reversed the price earlier this month).

Digital Assets

Binance ordered to remove Changpeng Zhao to get Dubai license

Binance, the world’s largest cryptocurrency exchange, has obtained a Virtual Asset Service Provider (VASP) license in Dubai.

Crypto Insider

Evolution and current state of global crypto adoption

Every four years, the crypto world gets hyped for the Bitcoin halving. Past halvings, like the one of May 2020, saw a massive increase in BTC transactions, which was driven by growing adoption and community involvement.

Digital Assets

Binance set to re-enter India with $2 million fine settlement

Binance, the world’s largest cryptocurrency exchange, is preparing to re-enter the Indian market after agreeing to pay a $2 million fine, according to a report by the Economic Times.


Over 1,000 Builders, Partners, Investors and Enthusiasts Gather at Inaugural Global Event to Celebrate Sui

Last week in Paris, over 1,000 blockchain enthusiasts from 65 countries gathered at the inaugural Sui Basecamp during Paris Blockchain Week. This milestone event showcased major announcements and drew a global community, highlighting Sui’s impactful strides in blockchain technology.