A US district judge has denied a motion by Mizuho Bank that a class action lawsuit related to its relationship with the now defunct bitcoin exchange MtGox should be moved to Japan, CoinDesk reported.

MtGox, founded in 2010, was the leading bitcoin exchange based in Japan and by 2013 it was handling nearly 70% of all bitcoin transactions. However, in February 2014, the company suspended trading with CEO Mark Karpeles saying that the problem stemmed from "transaction malleability" - a software flaw that allowed outsiders to manipulate the bitcoin transactions and steal money from the exchange. Subsequently, the website as well as exchange service was shut down and MtGox filed for a form of bankruptcy protection from creditors.

Illinois resident Gregory Greene and California resident Joseph Lack first named Mizuho as a defendant in a class action lawsuit in March 2014, as it served as MtGox’s banking partner.

According to the document, following a reported U.S. investigation into money laundering on MtGox, Mizuho pressed Karpeles to close the MtGox bank account at Mizuho. When Karpeles refused, Mizuho took several measures in order to make the banking relationship “untenable” for MtGox including limiting the number and amount of MtGox customer withdrawals and refusing to process some wire transfers.

It further said that Mizuho stopped processing international wire withdrawals for MtGox by mid-2013, meaning that MtGox users who had wired fiat currency to Mizuho for deposit in MtGox’s bank account could not withdraw their money. However, the bank continued to accept deposits from the MtGox users and earned revenue from associated fees.

“Mizuho prohibited Mt. Gox from disclosing that the withdrawal difficulties were attributable to Mizuho or that Mizuho wanted to terminate its relationship with Mt. Gox. Mizuho knew that if Mt. Gox’s members learned of its prohibition on withdrawals of fiat currency from Mt. Gox’s Mizuho account, members would stop making deposits and Mizuho would stop collecting the associated fees”, U.S. District Judge Gary Feinerman noted.

Although Judge Feinerman rejected Mizuho’s request, he said that the class action lawsuit would need to produce a new plaintiff, or otherwise be required to move to the Central District of California.

“Mizuho’s motion to dismiss for want of personal jurisdiction is conditionally denied, with the condition being that putative class counsel file by April 4, 2016 a third amended complaint naming as a putative class representative an Illinois resident who is a member of the Deposit Subclass. If counsel fails to do so, this case will be transferred to the Central District of California”, he said.