🌎 Asian Banks Sued Over $1 Million Crypto Scam

Asian Banks Face Lawsuit Over $1 Million Crypto Scam

A California resident, Ken Liem, has filed a lawsuit against three Asian banks, alleging that they failed to protect him from a $1 million crypto scam by neglecting basic Know Your Customer (KYC) and Anti-Money Laundering (AML) checks.

The lawsuit targets Hong Kong-based Fubon Bank Limited and Chong Hing Bank Limited, as well as Singapore-based DBS Bank. According to the suit, Liem was duped out of nearly $1 million through accounts hosted by these banks after falling victim to a pig butchering scam.

What are Pig Butchering Scams?

Pig butchering scams involve manipulating a victim by pretending to be a romantic interest or a trusted connection to gain their trust before eventually misleading them into investing in fake crypto schemes.

In Liem’s case, he was approached on LinkedIn in June 2023 with an enticing cryptocurrency investment opportunity. Over several months, he was persuaded to transfer nearly $1 million to accounts allegedly held at Fubon Bank, Chong Hing Bank, and DBS Bank under the assumption that his funds would be securely invested on his behalf.

Banks’ Failure to Perform Adequate KYC and AML Checks

The lawsuit argues that the banks failed to perform adequate KYC and AML checks, which could have flagged suspicious activities and potentially prevented the fraud. The suit also claims that the banks violated the U.S. Bank Secrecy Act because DBS Bank operates a branch in California, while Fubon Bank and Chong Hing Bank allegedly processed transactions through Liem’s U.S.-based Wells Fargo account.

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

Additional Defendants Named in the Lawsuit

Four Hong Kong-based entities, namely Richou Trade Limited, FFQI Trade Limited, Xibing Limited, and Weidel Limited, are also named for opening accounts on Liem’s behalf and illegally redirecting the funds in question to third-party accounts.

Seeking Damages

Liem is seeking a minimum of $3 million in damages, holding both the banks and the named entities accountable for the losses incurred.

The Rise of Pig Butchering Scams

Pig butchering scams were the biggest threat vector in 2024, with a recent report claiming that over $3.6 billion was wiped out of the crypto sector via such schemes.