California man Ken Liem has sued three Asian banks for not stopping the theft of about $1 million in crypto. According to Liem’s claims, Fubon Bank, DBS Bank, and Chong Hing Bank failed to act in time after seeing red flags that could have prevented him from being scammed.
Liem said the crypto criminals contacted him on LinkedIn in June 2023, offering him a fake crypto investment scheme. Over the next few months, he transferred funds to the criminals in hopes that they were investing on his behalf. It was after a while that he realized he had been roped into a major fraud, blaming the banks for not helping to prevent it.
California man accuses banks of ignoring red flags
According to reports, the fraudsters moved funds through accounts at the bank before eventually moving them to third parties. In the filing, Liem alleges that the financial institutions did not meet the required Know Your Customer (KYC), Anti-money Laundering (AML), and Bank Secrecy Act standards.
He said the banks chose to overlook the likelihood of fraud carried out between different accounts on their platforms. Liem claimed that they turned a blind eye to suspicious activities, as a simple review would have uncovered that the fraudster’s business was unlawful.
He claimed that the bank failed to uphold the Bank Secrecy Act, seeing that DBS has a branch in California. Fubon and Chong Hing, on the other hand, processed funds through Wells Fargo. Other entities including Xibing, and Richou Trade were also named in the lawsuit, with Liem claiming that they misrepresented the use of his money and diverted it to unauthorized accounts.
Crypto theft dropped slightly in December
Liem wants a jury trial and wants payments in damages worth $33 million. In his filing, he believes that the banks and linked entities played a role in aiding the scam. Another crypto scam case report involved Japan’s DMM Bitcoin. The $308 million Bitcoin heist was carried out by a group called ‘TradeTraitor.’ The group deceived employees of the platform while posing as recruiters on LinkedIn.
However, crypto losses dropped to $29 million in December 2024. According to blockchain security firm CertiK and Peckshield, it was the lowest figure in 2024, and a stark drop from October’s $115 million losses. While CertiK registered $28 million in losses, Peckshield recorded $24 million in losses. Despite the drop, December was eventful, with GemPad and LastPass suffering exploits. GemPad lost $2.1 million to hackers while FEG lost $1 million.