A California resident has filed a $3 million lawsuit against three banks, alleging that their failure to conduct basic Know Your Customer (KYC) and Anti-Money Laundering (AML) checks facilitated a crypto scam that resulted in a loss of nearly $1 million.
Ken Liem is suing Hong Kong-based Fubon Bank Limited, Chong Hing Bank Limited, and Singapore-based DBS Bank, accusing them of negligence after scammers tricked him into transferring large sums of money to accounts hosted by these institutions. The suit, filed on December 31, 2024, claims that these banks allowed fraudsters to exploit their accounts for a “pig butchering” scam.
The Scam: Pig Butchering Tactics Used to Deceive Victim
Pig butchering scams are a form of long-term deception where scammers gain the trust of their victims by pretending to be romantic interests or trusted business associates. Over time, they manipulate their victims into investing in fake crypto schemes.
Liem’s ordeal began in June 2023 when he was approached on LinkedIn by scammers posing as representatives of a lucrative cryptocurrency investment opportunity. Over several months, Liem was persuaded to transfer nearly $1 million into accounts under the false impression that his funds would be safely invested on his behalf.
Banks Accused of Failing Basic Due Diligence
According to the lawsuit, the banks involved in processing Liem’s funds failed to carry out adequate KYC and AML checks, which could have flagged suspicious activities and possibly prevented the scam. The suit argues that these lapses were in violation of the U.S. Bank Secrecy Act, which requires financial institutions to monitor and report suspicious activity to combat fraud and money laundering.
DBS Bank operates a branch in California, while Fubon Bank and Chong Hing Bank are accused of processing transactions through Liem’s U.S.-based Wells Fargo account, bringing the banks under the jurisdiction of U.S. financial regulations.
Additional Entities Named in the Lawsuit
The lawsuit also names four Hong Kong-based entities—Richou Trade Limited, FFQI Trade Limited, Xibing Limited, and Weidel Limited. These companies allegedly opened accounts on Liem’s behalf and rerouted his funds to third-party accounts, further complicating the scam and the efforts to trace the funds.
Seeking $3 Million in Damages
Liem is now seeking a minimum of $3 million in damages, holding both the banks and the named entities responsible for the financial loss he incurred. The lawsuit is one of the latest in a growing number of legal actions taken by crypto scam victims in the wake of massive financial losses.
The Growing Threat of Pig Butchering Scams
Pig butchering scams have become one of the most significant threats in the crypto sector, with recent reports revealing that over $3.6 billion was lost to such schemes in 2024 alone. According to Cyvers, these scams are now the leading vector for fraud in the crypto industry, leaving victims with little recourse for recovery.
However, as seen with Liem’s case, some victims are fighting back through the courts. In October 2024, Hector Gustav Gutierrez, a U.S. citizen, filed a lawsuit after losing 33 Bitcoin to what he claims was a pig butchering scam operated by a Southeast Asian crime syndicate.
As cryptocurrency continues to attract new investors, the risks of scams like pig butchering are becoming increasingly apparent. This lawsuit underscores the need for greater vigilance and accountability from both financial institutions and crypto platforms in preventing such frauds.
