‘Pig Butchering’ Victim Sues Asian Banks for $1 Million Crypto Fraud

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As a seasoned crypto investor who has seen more than my fair share of market volatility and scams, the recent lawsuit filed by Ken Liem against three Asia-based banks over a $1 million crypto fraud is a stark reminder of the risks that come with this new frontier.

I’ve been in the game long enough to know that the crypto world can be both exciting and treacherous, but the “Pig Butchering” scam Liem fell victim to is a whole new level of deceit. I’ve heard of phishing attacks, rug pulls, and pump-and-dumps, but this slow and insidious method of building trust before striking is something else entirely.

The fact that these funds were transferred through three major banks, who allegedly failed to carry out adequate checks, is downright alarming. It’s hard not to feel a sense of betrayal when you think about the role these institutions should have played in preventing such fraud.

As for the U.S. Bank Secrecy Act violations, it’s disheartening to see banks apparently helping move millions for illegal purposes. I can’t help but wonder if they would be so lax with their checks and balances if the amounts at stake were smaller or if the perpetrators weren’t hiding behind the anonymity of the internet.

The fact that this scam is part of a larger trend, with over $3.6 billion lost to similar schemes in 2024, is a wake-up call for all of us in the crypto community. We need to be more vigilant than ever, and it’s clear that security measures must evolve to stay ahead of these increasingly complex and coordinated attacks.

On a lighter note, I guess the silver lining here is that at least I didn’t lose my life savings – just a significant chunk of it! But hey, as they say, you can’t make an omelette without breaking a few eggs… or something like that!

As a financial analyst, I find myself in a precarious situation after unwittingly becoming a victim of a substantial cryptocurrency scam, totaling nearly $1 million. Now, I’m taking legal action against three banks based in Asia, alleging that they failed to perform basic due diligence checks that could have prevented this fraud from occurring.

The plaintiff, Ken Liem, filed the lawsuit on December 31, 2024, in a California court.

$1 Million Crypto Fraud Sparks Lawsuit

In June 2023, it was revealed that Liem had fallen victim to a “cryptocurrency investment scheme,” as reported by his attorneys. This scheme, also known as a “pig butchering” scam, initially approached him through LinkedIn.

Pig Butchering” is a unique form of cryptocurrency deception, deviating from conventional crypto fraud techniques. This term is symbolic, likening the process to gradually fattening a pig for slaughter. In this scam, con artists carefully cultivate trust with their victims over an extended period before eventually defrauding them, much like the slow fattening of the pig before it’s killed.

Over a series of months, I found myself transferring substantial amounts to entities claiming to be crypto investors. I believed, in good faith, that these entities would utilize the funds for investment purposes.

As reported by Liem’s lawyers, the money was moved to three banks located in Asia – Fubon Bank Limited in Hong Kong, Chong Hing Bank Limited, also in Hong Kong, and DBS Bank Limited in Singapore. It is said that these suspected individuals subsequently transferred the funds to other accounts.

In simpler terms, Liem’s legal team claims that the banks neglected to perform thorough verifications such as identifying the customer (KYC) and anti-money laundering checks (AML). These omissions could have alerted them to suspicious behavior, thereby preventing fraudsters from creating accounts.

It appears that the banks neglected to disclose transactions involving suspicious funds transferred from the U.S. to multiple Asian entities they oversaw, which seemed to facilitate the transfer of large sums for illicit activities.

Furthermore, the lawsuit alleges that the banks have breached the U.S. Bank Secrecy Act requirements. This law mandates that financial entities should document suspicious transactions and keep comprehensive records of all transactions.

Because DBS has a branch in California, it falls under the jurisdiction of the relevant law. In a similar manner, both Fubon and Chong Hing conducted transactions using Liem’s account at Wells Fargo, which is based in the United States.

Liem is seeking a jury trial and a minimum of $3 million in damages.

In two concerning developments, it was revealed that crypto-related hacks and scams resulted in approximately $2.3 billion in losses during the year 2024. Additionally, a troubling pattern emerged with the rise of “Pig Butchering” scams, which managed to steal over $3.6 billion from victims who were not initially aware they were being deceived.

As an analyst, I can’t help but emphasize the significance of incorporating advanced AI technologies for risk assessment, validating transactions, and detecting anomalies in light of the escalating number of access control breaches and intricate scams such as Pig Butchering. It is crucial that our security measures adapt and advance to stay one step ahead of the growing sophistication and coordination of cyber threats in the Web3 landscape, as highlighted by Cyvers’ recent statement to BeInCrypto.

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2025-01-03 12:41