Crypto Scam Victim Sues Asian Banks Including DBS Bank Over $1 Million Loss

Lawsuit Filed Against Major Asian Banks for Alleged Negligence

Three prominent Asian banks are facing legal action in the United States over their role in a crypto scam that cost a local resident nearly $1 million.

The lawsuit, filed on 31 December 2024, claims that Fubon Bank, Chong Hing Bank, and DBS Bank failed to carry out basic checks that could have prevented the fraud from taking place.

Victim Deceived Through LinkedIn by Crypto Scammers

Ken Liem, a resident of California, was lured into a fraudulent cryptocurrency investment scheme after being contacted on LinkedIn in June 2023.

The scammers, using the tactic of "pig butchering"—a method where victims are manipulated by supposed romantic or trusted contacts—persuaded Liem to transfer significant sums of money to accounts at Fubon Bank, Chong Hing Bank, and DBS Bank.

Over the course of several months, Liem sent almost $1 million under the false belief that his funds would be invested in cryptocurrency on his behalf.

Did the Banks Fail in Their Duty?

The heart of the lawsuit lies in the claim that the banks failed to meet crucial regulatory requirements, such as Know Your Customer (KYC) and Anti-Money Laundering (AML) checks.

According to Liem’s legal team, these failures allowed the fraudsters to move large sums of money through the banks without raising any red flags.

The lawyers assert that a simple review of the transactions would have revealed the suspicious nature of the accounts, which were ultimately used to facilitate the fraud.

The attorneys argue that the banks were "willfully blind" to the illicit activity occurring within their systems, enabling the scammers to funnel the money into various third-party accounts.

Violating the US Bank Secrecy Act?

Liem’s attorneys also allege that the banks violated the US Bank Secrecy Act, which mandates financial institutions to report suspicious activities to the Financial Crimes Enforcement Network (FinCEN).

They point out that DBS Bank operates a branch in California, while Fubon and Chong Hing processed Liem’s transactions through his Wells Fargo account in the United States.

This, they claim, puts the banks under US jurisdiction and subject to the Bank Secrecy Act’s regulations.

The lawsuit highlights the failure of the banks to monitor and report the suspicious transfers, accusing them of neglecting their responsibilities under US law.

How Did the Fraudsters Move the Money?

In addition to the banks, the lawsuit also names four Hong Kong-based entities—Richou Trade, FFQI Trade, Xibing, and Weidel—as co-conspirators.

These companies are accused of opening accounts on behalf of the fraudsters and illegally diverting Liem's funds to third-party accounts.

Liem’s lawyers argue that these companies falsely assured him the funds would be used for legitimate cryptocurrency investments, only for them to be redirected through a complex web of transactions.

Seeking Compensation and Accountability

Ken Liem is now seeking a jury trial and a minimum of $3 million in damages, holding both the banks and the companies responsible for the fraudulent activities that led to his financial loss.

His legal team maintains that the banks’ negligence played a central role in the success of the scam, which ultimately resulted in significant losses for Liem.

Pig Butchering Scams on the Rise in Crypto

Pig butchering scams have become a significant threat in the cryptocurrency space, with figures from 2024 showing that over $3.6 billion was lost to such schemes globally.

These scams, which prey on victims' trust and manipulate them into making investments, are particularly difficult to trace, as they often involve complex international transactions and multiple entities.

Liem’s lawsuit follows a similar case filed by Hector Gustav Gutierrez in October 2024, where he also sought legal recourse after falling victim to a pig butchering scam that resulted in the loss of 33 Bitcoin.

As the crypto sector continues to grapple with scams, this lawsuit could set a precedent for future legal battles against financial institutions accused of failing to stop such crimes.