After falling victim to a nearly $1 million crypto scam, a California resident is suing three Asian banks, accusing them of neglecting basic checks that could have prevented the fraud.
Plaintiff Ken Liem filed the lawsuit on December 31, 2024, in a California court.
$1 Million Crypto Fraud Sparks Lawsuit
Lawyers said Liem was duped in a “pig butchering” scam. In June 2023, scammers contacted him via LinkedIn with an offer to invest in cryptocurrency.
“Pig butchering” is a type of cryptocurrency scam that differs from traditional crypto scams in its methods. The term is a metaphor that refers to the process of slowly fattening a pig before slaughtering it. Similarly, in this scam, fraudsters build trust with their victims over time before deceiving them.
Over the course of several months, Liem transferred large sums of money to individuals posing as crypto investors. He assumed the individuals would use the funds for investments.
According to Liem's legal team, the funds were transferred to three Asian banks: Hong Kong's Fubon Bank Limited, Chong Hing Bank Limited and Singapore's DBS Bank Limited. The alleged scammers then transferred the funds to third-party accounts.
Liem’s lawyers argue that the banks failed to carry out adequate checks, including Know Your Customer (KYC) and Anti-Money Laundering (AML). These could have flagged suspicious activity and prevented fraudsters from opening accounts.
Banks involved in security breaches and multi-million dollar frauds
The banks failed to report illicit funds moved from the United States to several Asian entities whose accounts they managed. As a result, the banks apparently helped move millions for illegal purposes.
Additionally, the lawsuit accuses the banks of violating the U.S. Bank Secrecy Act, which requires financial institutions to report suspicious activity and maintain detailed records of transactions.
Since DBS operates a branch in California, the bank is subject to the law. Similarly, Fubon and Chong Hing processed transactions through Liem’s US-based Wells Fargo account.
Liem is seeking a jury trial and a minimum of $3 million in damages.
Separately, the news comes as crypto hacks and scams led to losses of more than $2.3 billion in 2024. Another worrying trend has been the prevalence of “Pig Butchering” scams. These elaborate fraud schemes have swindled more than $3.6 billion from unsuspecting users.
The rise in access control breaches and sophisticated scams like Pig Butchering highlights the importance of implementing AI-powered risk assessment, transaction validation, and anomaly detection tools. Security must evolve to stay ahead of increasingly complex and coordinated attacks, security firm Web3 Cyvers told BeInCrypto.
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