Three Asian banks are being sued after they allegedly failed to protect a customer from a $1 million crypto scam by neglecting basic Know Your Customer and Anti-Money Laundering checks.
Ken Liem, a resident of California, has filed a lawsuit against three banks, namely Hong Kong-based Fubon Bank Limited and Chong Hing Bank Limited, alongside Singapore-based DBS Bank, after crypto scammers duped him out of nearly $1 million through accounts hosted by these banks.
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.
According to the Dec. 31 suit, Liem was tricked by using similar tactics after being 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.
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, bringing them under the jurisdiction of local financial regulations.
Under the U.S. Bank Secrecy Act, financial institutions must monitor, document, and report suspicious transactions to prevent fraud and money laundering.
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.
Liem is seeking a minimum of $3 million in damages, holding both the banks and the named entities accountable for the losses incurred.
Pig butchering scams were the biggest threat vector in 2024, with a recent Cyvers report claiming that over $3.6 billion was wiped out of the crypto sector via such schemes.
While in most cases, victims are left with empty wallets and little hope for justice, some turn to the courts to fight back. In one such instance, Hector Gustav Gutierrez, a U.S. citizen, filed a lawsuit in October 2024 after losing 33 Bitcoin in what he claims was a pig butchering scam orchestrated by a Southeast Asian crime syndicate.
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