Key Takeaways
- The case claims the banks failed to perform essential checks that could have prevented the fraud.
- It also alleges the banks overlooked clear signs of fraud, such as the lack of credible evidence supporting the legitimacy of the account holders.
A California resident has filed a lawsuit against three Asia-based banks, alleging negligence that allowed crypto scammers to defraud him of nearly $1 million. The lawsuit filed on December 31, 2024, claims the banks failed to perform essential checks that could have prevented the fraud.
The plaintiff, Ken Liem, claims he was the victim of a “pig butchering” scam. In this type of scam, unsuspecting users are defrauded by organised cyber scammers who use fake online identities to lure investors looking to make quick money.
According to the lawsuit, Liem was approached on LinkedIn in June 2023 with a crypto investment opportunity. Over the next several months, he transferred substantial funds to accounts at Hong Kong-based Fubon Bank Limited and Chong Hing Bank Limited, as well as Singapore-based DBS Bank Limited, believing the money would be invested on his behalf.
Instead, the funds were funnelled into third-party accounts, making them difficult to trace. Liem’s attorneys argue that the banks failed to carry out adequate Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, which would have flagged the suspicious accounts.
“The banks turned a blind eye to illicit transactions moving from the United States to accounts they managed,” the lawsuit states. It also alleges the banks overlooked clear signs of fraudulent activity, such as the lack of credible evidence supporting the legitimacy of the account holders.
The lawsuit further accuses the banks of violating the U.S. Bank Secrecy Act, which requires financial institutions to monitor and report suspicious activity. Liem’s attorneys argue that DBS Bank’s branch in California, along with transactions processed through his U.S.-based Wells Fargo account, places the banks under U.S. jurisdiction.
The suit also names four Hong Kong-based entities—Richou Trade Limited, FFQI Trade Limited, Xibing Limited, and Weidel Limited—that allegedly helped facilitate the scam. These entities are accused of opening accounts to redirect Liem’s funds to unauthorized third parties while falsely claiming they would invest the money in cryptocurrency ventures.
Liem is seeking at least $3 million in damages and has requested a jury trial. His attorneys emphasize that the banks’ lack of proper due diligence contributed significantly to the fraud.
Pig-butchering scams have increasingly targeted the crypto space in recent years. A 2024 report by Cyvers estimated that over $3.6 billion was lost to pig butchering scams last year.
