Citibank Under Fire: Ignored Red Flags in $20M Crypto Fraud Scandal
Another day, another banking giant caught napping while crypto criminals run wild. Citibank stands accused of turning a blind eye to glaring warnings in an alleged $20 million digital asset heist—proving once again that legacy finance moves at the speed of molasses when real money's at stake.
Red Flags? What Red Flags?
Sources claim multiple internal alerts screamed 'fraud' as suspicious transactions flew under Citibank's radar. But why bother with due diligence when you're too busy counting your 0.01% interest fees?
The $20M Question
While regulators scramble to play catch-up, the case exposes the brutal irony: banks demand KYC for grandma's $500 check but somehow miss eight-figure crypto movements. Maybe blockchain's transparency features should come with a 'For Dummies' guide for traditional finance.
As the SEC sharpens its knives, one thing's clear: in the tug-of-war between innovation and incompetence, your funds are the rope. Welcome to 2025—where the banks are still learning what Satoshi solved 16 years ago.
$20M Crypto Scam Linked to Citibank Lands in Court
According to the suit, Zidell fell victim to a pig butchering scam, a term for frauds that lure victims into fake online relationships and coax them into investing in fraudulent platforms.
Zidell says the scam began when a woman named “Carolyn Parker” contacted him on Facebook in early 2023.
She presented herself as a successful businesswoman and developed what Zidell describes as a romantic relationship.
Parker reportedly persuaded Zidell to invest in NFTs through a trading platform she endorsed.
Over several months, Zidell made 43 wire transfers totaling more than $20 million across multiple banks. Twelve of those transfers, totaling $4 million, went through Citibank to an entity named Guju Inc.
Zidell claims Citibank failed to investigate red flags associated with the Guju Inc. account, including unusually large and round-number transfers from multiple individuals and trusts.
He says these patterns should have triggered enhanced due diligence under standard anti-money laundering protocols.
“Citibank turned a blind eye to its statutory duties and obligations,” the complaint reads, alleging that the bank failed to monitor Guju’s activity despite clear signs of possible fraud.
Zidell is seeking damages for negligence, arguing that banks like Citibank must do more to safeguard clients from increasingly sophisticated fraud tactics involving digital assets.
Romance Crypto Scams Surge
Romance-based crypto scams have surged in recent years. According to data from Cyvers, these scams accounted for over $5.5 billion in losses last year across 200,000 incidents.
Chainalysis reported $9.9 billion in total crypto scam losses in 2024, a figure expected to grow.
Earlier this month, US authorities announced the seizure of $225 million linked to pig butchering schemes, the largest such crypto seizure in Secret Service history.
@NASAA identifies crypto and social media scams as major threats in 2025, with scammers using AI and emotional tactics to deceive investors. #CryptoScams #SocialMedia #AIhttps://t.co/T4A9oSXJ4m
As reported, Coinbase played a central role in a major crypto seizure operation led by the US Secret Service, helping recover $225 million in USDT stolen through pig butchering scams.
The effort began with Tether freezing 39 suspicious wallets and culminated in an intensive collaboration where Coinbase analysts traced fraudulent crypto flows and identified over 130 victims.
The stolen funds were tied to schemes run by criminal syndicates operating from Southeast Asia, often involving trafficked individuals forced to assist under threats of violence.
