Crypto scam victim files $3m lawsuit against three Asian banks

by

As a seasoned analyst with extensive experience in the financial sector, I find it disheartening to see such incidents of blatant negligence and misconduct by these reputable banks. It is my belief that these institutions, especially those operating globally, have a responsibility to uphold the highest standards of customer protection, particularly when it comes to anti-money laundering and Know Your Customer checks.

The case of Ken Liem serves as a stark reminder of the vulnerabilities that exist within our financial system, and the devastating consequences that can ensue from a lack of due diligence. The fact that this scam, known as pig butchering, has become such a significant threat vector in the crypto sector is alarming and underscores the need for stricter regulations and oversight.

It is not just the financial loss that victims suffer; it is also the emotional toll of being deceived by those they thought they could trust. I cannot help but think of the old adage, “Trust but verify,” especially in today’s digital age where scams can be disguised as legitimate opportunities.

On a lighter note, one might say that these banks have been caught with their pants down, or perhaps even their trousers in a virtual wash basin! But the truth is, these incidents highlight the need for a more robust and proactive approach to protect customers from such scams. It’s time we put our house in order before the scammers come calling again.

It has been reported that legal action is being taken against three financial institutions of Asian origin, as these entities are accused of not taking adequate measures to safeguard their client from a one million dollar cryptocurrency fraud. This alleged negligence stemmed from the failure to carry out essential customer identification (Know Your Customer) and anti-money laundering procedures.

Ken Liem, a Californian resident, has initiated a legal action against three financial institutions: Fubon Bank Limited from Hong Kong, Chong Hing Bank Limited also from Hong Kong, and DBS Bank based in Singapore. This legal action follows an incident where cryptocurrency scammers managed to defraud him of close to $1 million using accounts maintained by these banks.

Scams involving pig butchering work by deceiving victims, who are often led to believe they’ve found a potential love interest or a reliable associate. Once trust is established, these scammers dupe the victim into investing in supposed cryptocurrency ventures that don’t actually exist.

As stated in the lawsuit filed on December 31st, Liem fell victim to deceptive strategies that were employed following a LinkedIn approach in June 2023, which presented a tempting investment opportunity in cryptocurrency.

For a period of about eight months, he was convinced to move approximately one million dollars into accounts believed to be with Fubon Bank, Chong Hing Bank, and DBS Bank, under the belief that they would safely invest his money for him.

The legal case claims that the banks neglected to conduct thorough Know Your Customer (KYC) and Anti-Money Laundering (AML) verifications, steps that might have detected unusual transactions and possibly thwarted the fraudulent actions.

The lawsuit further asserts that these banks breached the U.S. Bank Secrecy Act. This is due to the fact that DBS Bank maintains a branch in California, while Fubon Bank and Chong Hing Bank are alleged to have handled transactions through Liem’s account at Wells Fargo, which is based in the United States. As a result, these banks fall under the purview of local financial regulations.

Financial institutions operating within the United States are required to keep an eye on, record, and notify authorities about any transactions that seem unusual or fishy, in order to minimize instances of fraud and money laundering under the Bank Secrecy Act.

As a researcher, I’ve uncovered some intriguing details regarding four entities based in Hong Kong: Richou Trade Limited, FFQI Trade Limited, Xibing Limited, and Weidel Limited. It appears that these companies have been implicated for opening accounts on behalf of an individual (Liem) and illicitly directing the funds under investigation to external accounts belonging to third parties.

As a diligent researcher, I am pursuing compensation in the amount of at least $3 million, aiming to hold responsible not only the banks but also the specified parties, as they are deemed liable for the financial losses I’ve sustained.

In the year 2024, pig butchering scams emerged as the most significant risk factor. According to a recent report by Cyvers, these fraudulent activities drained approximately $3.6 billion from the cryptocurrency market.

In 2024, pig butchering scams were identified as the major security concern. A recent study by Cyvers revealed that these deceptive practices caused a loss of around $3.6 billion in the crypto industry.

Typically, victims are left with an empty pocket and minimal prospects for justice, but some choose to take legal action to retaliate. In one such scenario, Hector Gustav Gutierrez, a U.S. resident, filed a lawsuit in October 2024, following the loss of 33 Bitcoin that he alleges was due to a pig-butchering scam carried out by a criminal organization based in Southeast Asia.

Read More

2025-01-03 10:20