Crypto Scam Sparks Legal Battle: Three Banks Sued for Ignoring Red Flags

A California man has filed lawsuits against Citibank, East West Bank, and Cathay Bank, alleging they failed to prevent a $20 million cryptocurrency scam. The plaintiff, Zidell, claims he was duped by fraudsters posing as a romantic interest and NFT investor through a fake trading platform that disappeared with his funds.

The court filings reveal a pattern of compliance failures: 43 transfers totaling $20 million were processed without intervention. Citibank received $4 million across 12 transactions, East West Bank $6.9 million via 18 transfers, and Cathay Bank $9.7 million through 13 transactions. Each institution allegedly ignored multiple red flags including round-number amounts and transfers to previously inactive accounts.

The case highlights growing scrutiny of traditional banks' role in crypto-related fraud. "The banks turned a blind eye to their statutory duties," the complaint states, referencing their failure to investigate what appeared to be a classic pig-butchering scheme - a long-term romance scam culminating in financial exploitation.