Citibank Accused of Ignoring Warnings in Alleged $20M Crypto Fraud Case
Citibank is facing a lawsuit from a man who claims the bank failed to flag suspicious transactions tied to a crypto romance scam that cost him $20 million.
Key Takeaways:
- Citibank is being sued for allegedly failing to flag suspicious transfers tied to a $20 million crypto romance scam.
- The plaintiff claims the bank ignored red flags, including large round-number transactions sent to a questionable entity.
- The case highlights growing pressure on banks to better detect and prevent fraud linked to digital assets.
Filed in Manhattan federal court on Tuesday, the complaint accuses Citibank of negligence and aiding fraudsters by failing to act on warning signs.
Plaintiff Michael Zidell alleges the bank allowed him to transfer nearly $4 million to scammers without raising alerts, despite several indicators of suspicious activity.
$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.
— Cryptonews.com (@cryptonews) March 7, 2025
@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.
The post Citibank Accused of Ignoring Warnings in Alleged $20M Crypto Fraud Case appeared first on Cryptonews.
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Citibank Accused of Ignoring Warnings in Alleged $20M Crypto Fraud Case
Citibank is facing a lawsuit from a man who claims the bank failed to flag suspicious transactions tied to a crypto romance scam that cost him $20 million.
Key Takeaways:
- Citibank is being sued for allegedly failing to flag suspicious transfers tied to a $20 million crypto romance scam.
- The plaintiff claims the bank ignored red flags, including large round-number transactions sent to a questionable entity.
- The case highlights growing pressure on banks to better detect and prevent fraud linked to digital assets.
Filed in Manhattan federal court on Tuesday, the complaint accuses Citibank of negligence and aiding fraudsters by failing to act on warning signs.
Plaintiff Michael Zidell alleges the bank allowed him to transfer nearly $4 million to scammers without raising alerts, despite several indicators of suspicious activity.
$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.
— Cryptonews.com (@cryptonews) March 7, 2025
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.
The post Citibank Accused of Ignoring Warnings in Alleged $20M Crypto Fraud Case appeared first on Cryptonews.
Read More
Stablecoin Protocol Resupply Exploited for $9.5M After Attacker Inflates Token Price