[2014-03-16] Mizuho Bank Listed as Defendant Over MtGox U.S Class Action

[Ripdon007]

mtgox..the titanic of 2014

https://coinreport.net/mizuho-bank-defendent-class-action/

[prophetx]

[thecarnie]

Adding that bank to the lawsuit is a sure fire way to guarantee that traditional banking systems no longer allow any interaction with bitcoin businesses in their accounts.  That was about the dumbest thing anyone could have done...  This fiasco started at MK.  The leak of the phone call where the bank was trying to push the account to close, and he refused.  They should have forced his hand if they thought there were problems.  But to involve them in the lawsuit was fucking stupid and will be detrimental to the forward push between crypto-currency and the fiat/brick-mortar world that we're trying to gain acceptance to. 

If Overstock.com's bank decides to stop doing business because of the bitcoin risk (even if his fiat is converted by Coinbase), then what -- all these big retailers you want to accept bitcoin won't touch it if their financial institutions threaten to stop doing business with them over it...

[Ripdon007]

Adding that bank to the lawsuit is a sure fire way to guarantee that traditional banking systems no longer allow any interaction with bitcoin businesses in their accounts.  That was about the dumbest thing anyone could have done...  This fiasco started at MK.  The leak of the phone call where the bank was trying to push the account to close, and he refused.  They should have forced his hand if they thought there were problems.  But to involve them in the lawsuit was fucking stupid and will be detrimental to the forward push between crypto-currency and the fiat/brick-mortar world that we're trying to gain acceptance to. 

If Overstock.com's bank decides to stop doing business because of the bitcoin risk (even if his fiat is converted by Coinbase), then what -- all these big retailers you want to accept bitcoin won't touch it if their financial institutions threaten to stop doing business with them over it...

You've got a good point. But i would expect Overstock's CEO to be a lot more clever

[thecarnie]

You've got a good point. But i would expect Overstock's CEO to be a lot more clever

Him, yes - I agree.  What's unfortunate is that while he is a champion for Bitcoin (and crypto-currencies in general), he can only do so much to help.  What's unfortunate is that he has the millions upon millions to force their hand.  No bank is going to walk away from his operation. 

But all the startups, the little guys, all the mom and pop joints that are the grass-roots of what bitcoin has started, will find it beyond difficult to maintain a relationship when their financial institutions say "It has come to our attention that your business entity now accepts bitcoin as a method of payment.  In light of recent events regarding litigation of financial establishments who have been associated (even distantly or reluctantly) with bitcoin related businesses, we can no longer continue our relationship with you or your business.  We will require the immediate liquidation and closure of your account.  This will also restrict your ability to accept other 'standard' means of established currency such as credit/debit cards.  We apologize for this inconvenience, and hate lose you as a customer, but the risk of financial loss due to litigation alone, let alone volatility of crypto-currency in general leaves us no choice."

Additionally, having your account forcibly close by your financial institution for whatever reason only makes it that much harder to re-establish new accounts with other institutions.  Just like there is a black book for crooked gamblers or criminals in the state of Nevada, US (the infamous black book banning individuals from casinos, etc) - banks and creditors have their own black books.  You get an account closed because they can't risk bitcoin associated lawsuits, and you can bet your ass you'll end up in that black book and unable to get accounts somewhere else...

I hope I'm wrong, but history creates precedent. 

[Bit_Happy]

What if Overstock, Tiger Direct, etc form a partnership that buys a few legit offshore banks?
Then they have their own chain of banks to use.

[notthematrix]

What if Overstock, Tiger Direct, etc form a partnership that buys a few legit offshore banks?
Then they have their own chain of banks to use.

They dont need to they just set use antities true were you can channel the bitcoin , wallmart is using the same kind of constructions
http://www.youtube.com/watch?v=d4o13isDdfY explains how this works , a very nice docu about offshore tax and multinationals
so if the us try's this they will lose a lot of money to other more liberal jurisdictions were the bitcoins can touch ground.
avoiding the US jurisdiction completely.

[Bit_Happy]

Wealthy bitcoiners buying a few fiat banks has an appealing irony.

[thecarnie]

Wealthy bitcoiners buying a few fiat banks has an appealing irony.

The only problem with this is the current hassles for 'becoming a bank', then again you're right back where you started because not only do banks benefit the customers, but you have to deal with other banks.  It's a vicious circle.  You have a good concept with that though - just that while it would work for many entities outside the US, with all the bullshit laws over regulations for doing business in the US as a bank (such as deposit insurance, and all the money transmitter stuff), you're right back where you started trying to deal with the conversion from Bitcoin to US fiat...

[nikkisnowe]

I guess there are a number of people who think that large banks are too big and too important to investigate whether they were involved in the theft of assets equalling $1/2 billion.  
Anyone who feels this way, send Bitcoin to:
1LzWk3MHqepG9mmJWK27ZjXRDAzH7njJJb
Once the number in that wallet reaches 750,000 BTC they will be distributed to the mtgox account holders who had them stolen from them.  I'm sure they will then be willing to stop instituting their legal right to recover their stolen property and you can feel better that the banks can get back to assisting and profiting from other criminals.

[Rygon]

Mizuho Bank should absolutely be included in this lawsuit. MtGox was releasing public statements claiming that fiat customer funds were secure in that bank, when it seems that may not have been the case. Mizuho Bank was a willing partner in this business, and they should have managed risk better. If they had spent more time looking into what was happening, they probably would have cut ties with MtGox earlier and stopped the ongoing fraud.

This will not hurt Bitcoin in the long-run. There is no lack of business professionals that can run a competent exchange and work with banks to do it the right way.

[thecarnie]

Mizuho Bank should absolutely be included in this lawsuit. MtGox was releasing public statements claiming that fiat customer funds were secure in that bank, when it seems that may not have been the case. Mizuho Bank was a willing partner in this business, and they should have managed risk better. If they had spent more time looking into what was happening, they probably would have cut ties with MtGox earlier and stopped the ongoing fraud.

This will not hurt Bitcoin in the long-run. There is no lack of business professionals that can run a competent exchange and work with banks to do it the right way.

What your're saying is it's the bank's job to audit the MtGox accounts and ledgers against their written statements.  That's absurd.