- A California victim wants $3M in damages, alleging bank negligence.
- Crypto scams caused $28M in losses in 2024, representing a 72% increase.
California’s Ken Liem has filed a complaint against three of Asia’s most significant banks, accusing them of an alleged failure to prevent a devastating cryptocurrency pig butchering scam from fleecing him of nearly $1 million. The plaintiff filed a complaint in the California district court on December 31, 2024, against three banks. He accused them of failing to follow basic Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols. The complaint alleges that these failures allowed scammers to launder his money.
The scam began in June 2023 on LinkedIn, where the fraudsters posed as representatives of a highly lucrative cryptocurrency investment. The fraudsters spent several months convincing Liem to transfer considerable sums into Fubon Bank Limited and Chong Hing Bank Limited, both located in Hong Kong, and DBS Bank Limited, which is in Singapore.Since money went to third-party accounts, hope for recovery is very slim.
Hong Kong-Related Companies in Crypto Scam
Other cases included four Hong Kong-related companies, Richou Trade Limited, FFQI Trade Limited, Xibing Limited, and Weidel Limited, with allegations that they were in cahoots with the scamsters. They are believed to have collaborated with the scamsters by opening accounts to drain Liem’s money based on false pretenses of cryptocurrency investments.
The banks and institutions are alleged to have been careless and also violating the U.S. Bank Secrecy Act for failure to detect the red flags that could have frustrated the scheme. The attorneys for Liem say that simple due diligence would have revealed suspicious activity related to the fraudulent accounts.
Liem is demanding at least $3 million in damages and also wants a jury trial. The case highlights the rising prevalence of the pig butchering scam. It also emphasizes the critical role financial institutions play in halting fraud.
Cyber reports that pig butchering scams have lost billions of dollars worldwide in the year 2024. The increased number of victims is taking lawsuits against these institutions, and this is causing financial organizations to face the consequences of their negligence. Crypto loss has decreased by 17% to $1.49 billion for the year 2024. Frauds have surged, however, with an increase of 72%, so there is a lot of urgency to have solid financial security.
