Asian Banks Sued for Negligence in $1 Million Crypto Scam
Three Asian banks are facing a lawsuit for allegedly failing to protect a customer from a $1 million crypto scam by neglecting basic Know Your Customer (KYC) and Anti-Money Laundering (AML) checks. The lawsuit, filed by Ken Liem from California, targets Hong Kong-based Fubon Bank Limited and Chong Hing Bank Limited, as well as Singapore-based DBS Bank, for their role in facilitating the scam.
The scam, known as a pig butchering scheme, involves deceiving victims into investing in fake cryptocurrency schemes by gaining their trust through false pretenses. In Liem’s case, he was approached on LinkedIn in June 2023 with a fraudulent crypto investment opportunity that eventually led to him transferring nearly $1 million to accounts held at the three banks.
The lawsuit alleges that the banks failed to conduct proper KYC and AML checks, which could have flagged the suspicious activities and prevented the fraud. Additionally, it claims that the banks violated the U.S. Bank Secrecy Act due to their operations in California and their involvement in processing transactions through Liem’s U.S.-based Wells Fargo account.
Liem is seeking damages of at least $3 million from the banks and four Hong Kong-based entities that were involved in opening accounts and redirecting funds. Pig butchering scams have become a significant threat in 2024, with reports indicating that over $3.6 billion has been lost in the crypto sector due to such schemes.
While many victims of pig butchering scams are left with little recourse, some, like Hector Gustav Gutierrez, have turned to the courts for justice. Gutierrez filed a lawsuit in October 2024 after falling victim to a similar scam orchestrated by a Southeast Asian crime syndicate, resulting in the loss of 33 Bitcoin.