Three Asian banks are being sued for allegedly failing to protect a customer from $1 million in crypto fraud by neglecting basic Know Your Customer and Anti-Money Laundering checks.
California resident Ken Liem filed court case against three banks, namely Hong Kong-based Fubon Bank Limited and Chong Hing Bank Limited, in addition to Singapore-based DBS Bank, after crypto scammers defrauded him of nearly $1 million through accounts hosted at these banks.
Pig slaughter involves manipulating a victim by posing as a romantic interest or trusted connection to gain their trust before ultimately tricking them into investing in fake crypto systems.
According to the Dec. 31 lawsuit, Liem was deceived into using similar tactics after 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 money would be safely invested on his behalf.
The lawsuit alleges that the banks failed to conduct adequate KYC and AML checks, which could have flagged suspicious activity and potentially prevented the fraud.
The lawsuit also alleges 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. Wells Fargo account, putting them under the jurisdiction of local financial regulations. .
The U.S. Bank Secrecy Act requires financial institutions to 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 behalf of Liem and illegally diverting the relevant funds to third-party accounts.
Liem is seeking damages of at least $3 million, holding both the banks and the named entities liable for the losses suffered.
Pig slaughter scams were the biggest threat vector in 2024, with a recent Cyvers report claiming that more than $3.6 billion was wiped out of the crypto sector through such schemes.
While in most cases victims are left with empty wallets and little hope for justice, some are turning to the courts to fight back. In one such case, Hector Gustav Gutierrez, a US citizen, filed a lawsuit in October 2024 after losing 33 Bitcoin in what he claims was a pig slaughterhouse orchestrated by a Southeast Asian crime syndicate.
