Mizuho says not liable for “passive receipt” of MtGox’s deposits

Maria Nikolova

Mizuho insists there was no affirmative action on its part when it accepted the deposits from MtGox’s customers.

The disagreement between former customers of ill-fated Bitcoin exchange MtGox and Japanese bank Mizuho is worsening, as the bank continues to insist that it is not responsible for any damage suffered by the clients of the exchange who put money into MtGox’s account with the bank but could not then withdraw what they deposited.

The bank’s silence argument persists – at least this is indicated by the latest documents it filed with the California Central District Court earlier this week.

Let’s briefly recall that the case against the bank, captioned Joseph Lack v. Mizuho Bank, Ltd., et al (2:18-cv-00617), accuses Mizuho of intentionally defrauding MtGox’s clients by concealing that the bank was no longer accepting withdrawal requests.

According to the complaint, when MtGox’s head Mark Karpeles refused to close Mt. Gox’s account at Mizuho, the bank implemented policies it kept secret from the public that were seeking to frustrate Mizuho’s relationship with Mt. Gox. Thus, Mizuho limited and ultimately stopped processing international wire withdrawals from Mt.Gox’s Mizuho account. Mizuho, however, continued to accept international cash deposits into the Mt. Gox account.

In January 2014, plaintiff Joseph Lack, a resident of California, joined Mt. Gox. Upon joining, Lack wired $40,000 to Mt.Gox’s Mizuho account. Mizuho accepted the transfer and collected the transaction fee. On February 24, 2014, the website of the exchange went dark. Lack waited in vain for his deposit to appear in his Mt Gox account. He did not succeed in getting his money back.

Now, Mizuho insists that it is not responsible for any damage caused to Lack and other depositors as it did not commit an act. The bank says it was a simply a passive recipient of wired money.

Mizuho also argues that the action brought by Lack puts defendants like Mizuho – including but not limited to foreign banks accepting wire transfers – in a position where they are subject to jurisdiction in every U.S. state based on a policy that they applied to all their worldwide customers equally and did not “expressly aim” at any state in particular.

According to the bank, it risks being subject to personal jurisdiction in courts all over the world based on its silence and passive receipt of information from individuals who interact with a company’s website, wire money, or engage in other forms of e-commerce. Mizuho argues that such an outcome would be contrary to the Supreme Court’s jurisprudence because it would subject the defendant to personal jurisdiction in various forums in the absence of any intentional affirmative act by the defendant in or expressly aimed at the forum state.

Putting it briefly, Mizuho argues that it did not commit any action by receiving money and that the bank’s passiveness did not target anybody, including Lack.

According to Mizuho, its passive receipt of a deposit by wire transfer sent by Lack in California to Mt. Gox’s bank account at Mizuho is similar to the passive, open-to-all-comers activity. By holding that Mizuho’s passive, indirect contact with Lack is enough to subject Mizuho to personal jurisdiction in California simply because Lack initiated his wire transfer there, Mizuho could be haled into court in every state in which a Mt. Gox customer initiated a wire transfer (and, if foreign courts were to adopt the same principle, in any non-U.S. jurisdiction where a customer initiated a wire transfer), even though Mizuho did not take any affirmative act manifesting its intent to target those states.

Mizuho requests that the Court certify the Order for interlocutory appeal to the United States Court of Appeals for the Ninth Circuit.

Read this next

blockdag

BlockDAG’s Impressive 30,000x ROI Potential and Moon-Based Keynote Captivate Solana And Bitcoin Cash Crypto Investors

Discover BlockDAG’s impressive moon keynote launch and its promise of a 30,000x ROI that is drawing investors from Solana and Bitcoin Cash.

Market News

This is it, the USD Strength has Come to an End

In the aftermath of Israel’s retaliatory strikes in Iran, the currency markets have entered a phase of heightened volatility, reflecting the intricate interplay between geopolitical tensions and economic fundamentals.

blockdag

BlockDAG Leads DeFi Innovation with $19M Presale, Overshadowing Cardano and Binance Coin With 30,000x ROI and DAG Structure

Learn about BlockDAG’s growth in its presale, surpassing $19M, and its impact on the DeFi landscape, overshadowing movements in Cardano and Binance Coin (BNB).

blockdag

BlockDAG Offering a Fresh Take on Meme Coin Development Amid Solana’s Challenges and Floki Inu’s Price Fluctuations With 30,000x ROI

Dive into how BlockDAG’s innovative presale, low-code platforms, and potential 30,000x ROI, outperform Solana’s technical hurdles and Floki Inu’s market predictions.

blockdag

BlockDAG Excels With $2.2M In Miner Sales And Moonshot Teaser, Overshadowing Litecoin’s Rally And Dogwifhat’s Market Highs

Explore how BlockDAG’s $2 million Miner Sales & Moonshot Teaser eclipse the Litecoin price recovery and the Dogwifhat all-time high.

blockdag

BlockDAG Leads Top 6 Cryptocurrencies to Buy in 2024 with a Potential Price Surge to $10 Leaving Cosmos, BNB, and Ethereum Behind

Discover the top six cryptocurrencies in 2024, including BDAG’s remarkable growth potential, BNB’s durability, Cosmos’ connectivity, and ETH’s eco-friendly advances.

Retail FX

Weekly Roundup: Prop firm arbitrarily accounts, Interactive Brokers’ CFDs in Japan

FX, Fintech and cryptocurrency markets have been bustling with activity over the past week, as is often the case. Keep yourself informed and ahead of the curve with a curated selection of crucial stories and developments that are most relevant to those engaged in the markets.

blockdag

BlockDAG Redefines Crypto Mining as Presale Tops $18.5M, Outshining Ethereum ETF & Dogecoin Dynamics

The recent approval of the first Ethereum ETF in Hong Kong underscores a significant advancement in the cryptocurrency’s mainstream acceptance. While Ethereum continues to attract institutional attention, the Dogecoin price prediction suggests a possible resurgence, despite its current undervaluation from past highs.

Digital Assets

Bitcoin halving is done: ViaBTC mines historic block 840K

The Bitcoin network has confirmed its fourth-ever halving block, mined by the cryptocurrency pool ViaBTC, according to data from Blockchain.com. This significant event in the Bitcoin ecosystem reduced the mining reward by half, a deflationary measure occurring approximately every four years to control the issuance of new bitcoins and curb inflation.

<