Crypto Scam Victim Files $3 Million Lawsuit Against Three Asian Banks
A California resident has filed a $3 million lawsuit against three Asian banks, alleging they failed to implement proper Know Your Customer (KYC) and Anti-Money Laundering (AML) measures, enabling scammers to steal nearly $1 million through fraudulent cryptocurrency schemes.
Details of the Lawsuit
Ken Liem, the plaintiff, is suing Hong Kong-based Fubon Bank Limited and Chong Hing Bank Limited, along with Singapore-based DBS Bank, claiming negligence in safeguarding against fraud. The lawsuit, filed on Dec. 31, highlights their alleged failure to prevent funds from being funneled into accounts linked to a sophisticated crypto scam.
The incident reportedly began in June 2023, when Liem was approached on LinkedIn with a cryptocurrency investment opportunity. Over several months, scammers exploited his trust, convincing him to transfer nearly $1 million to accounts hosted by the three banks under the guise of secure investments.
Banks Accused of Regulatory Failures
The lawsuit argues that the banks breached U.S. financial regulations, including the Bank Secrecy Act (BSA), which requires financial institutions to monitor and report suspicious transactions to prevent fraud and money laundering.
While DBS Bank operates a branch in California, Fubon Bank and Chong Hing Bank are accused of processing transactions via Liem’s U.S.-based Wells Fargo account, placing them under U.S. jurisdiction and compliance requirements.
The legal filing claims these institutions neglected their duty to conduct adequate KYC and AML checks, failing to detect irregularities and potentially preventing the fraud.
Entities and Scam Techniques Involved
Four Hong Kong-based entities—Richou Trade Limited, FFQI Trade Limited, Xibing Limited, and Weidel Limited—are also implicated in the lawsuit. These firms allegedly opened accounts to redirect Liem’s funds to third-party accounts, facilitating the scam.
The case highlights the growing threat of pig butchering scams, where fraudsters build trust by impersonating romantic or professional connections before coercing victims into fake crypto investments.
Growing Threat of Crypto Scams
Pig butchering scams emerged as one of the most damaging threats in 2024. A report from Cyvers revealed losses of over $3.6 billion across the crypto industry due to such schemes.
While most victims face difficulties recovering losses, some turn to legal action in pursuit of justice. In a similar case, U.S. citizen Hector Gustav Gutierrez filed a lawsuit in October 2024 after losing 33 Bitcoin in an alleged pig butchering scam orchestrated by a Southeast Asian crime syndicate.
Seeking Accountability and Damages
Liem is demanding a minimum of $3 million in damages, holding the banks and entities accountable for failing to prevent the fraudulent activity. His case underscores the need for stricter enforcement of financial compliance standards and greater vigilance from financial institutions handling cryptocurrency-related transactions.
Key Takeaways
As cryptocurrency adoption grows, so does the sophistication of scams exploiting loopholes in regulatory compliance. This lawsuit highlights the importance of enhanced KYC and AML protocols in preventing fraud. It also serves as a wake-up call for financial institutions to strengthen oversight and protect clients from emerging threats in the digital asset space.
