Crypto scam victim files $3m lawsuit against three Asian banks

Three Asian banks are being sued for allegedly failing to protect a customer from a $1 million crypto scam by neglecting basic Know Your Customer and Anti-Money Laundering controls.

Ken Liem, who lives in California, filed a lawsuit against three banks, Singapore-based DBS Bank as well as Hong Kong-based Fubon Bank Limited and Chong Hing Bank Limited, after he defrauded approximately $1 million through accounts hosted by crypto fraudsters. by these banks.

Pig slaughter scams involve manipulating the victim by posing as a romantic interest or trusted contact to gain their trust, eventually leading them to invest in fake crypto schemes.

According to the Dec. 31 lawsuit, Liem was deceived using similar tactics after he was approached on LinkedIn in June 2023 with an attractive cryptocurrency investment opportunity.

Over several months, he was persuaded to transfer nearly $1 million to accounts purportedly at Fubon Bank, Chong Hing Bank and DBS Bank, on the assumption that the funds would be deposited securely in his name.

The lawsuit alleges that banks fail to conduct adequate KYC and AML checks, which could flag suspicious activity and potentially deter fraud.

The lawsuit also alleges that the banks violated the U.S. Bank Secrecy Act because DBS Bank has a branch in California, while Fubon Bank and Chong Hing Bank processed transactions through Liem’s ​​U.S.-based Wells Fargo account, placing them under the jurisdiction of local financial regulations. It is claimed that he stung. .

Under the U.S. Bank Secrecy Act, financial institutions are required to monitor, document and report suspicious transactions to prevent fraud and money laundering.

It is known that four Hong Kong-based organizations, Richou Trade Limited, FFQI Trade Limited, Xibing Limited and Weidel Limited, opened accounts in Liem’s ​​name and illegally directed the funds to third-party accounts.

Liem demands compensation of at least 3 million dollars, holding both the banks and the mentioned institutions responsible for the damages incurred.

Pig slaughter scams were the biggest threat vector in 2024; A recent Cyvers report claimed that $3.6 billion was wiped out of the crypto industry through such schemes.

While in most cases victims have empty wallets and little hope of justice, some turn to the courts to fight. In one such example, US citizen Hector Gustav Gutierrez filed a lawsuit in October 2024 after losing 33 Bitcoins in what he claimed was a pig slaughter scam orchestrated by a Southeast Asian crime syndicate.