A California man, Ken Liem, has taken legal action against three prominent Asian banks—Fubon Bank, Chong Hing Bank, and DBS Bank—for allegedly running a $1 million cryptocurrency scam.
The lawsuit, filed in California district court on December 31, 2024, alleges that these banks failed to meet key financial compliance requirements, including Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, which could have prevented fraud. .
Alleged Failures in Legal Compliance and Financial Oversight
The case traces the origins of the scam back to June 2023, when Liem was contacted on LinkedIn about what appeared to be a legitimate cryptocurrency investment opportunity. In the months that followed, Liem transferred significant amounts of money to accounts held at these three banks.
These funds were then transferred to third party accounts, allegedly controlled by fraudsters. Liem’s legal team asserts that basic compliance checks may reveal irregularities in these accounts, potentially flagging them as suspicious before significant damage occurs.
Liem’s lawyers also argued that the banks involved neglected important KYC and AML measures, which are standard industry procedures designed to prevent financial fraud.
They say even a basic review of the accounts would have revealed inconsistencies, including a lack of corroborating evidence supporting the legitimacy of the account holders’ business activities. The lawsuit alleges that banks may have ignored clear warning signs and, in doing so, played an indirect role in facilitating the scam.
Additionally, the lawsuit accuses the banks of violating the Bank Secrecy Act (BSA), which mandates financial institutions to maintain transaction records and report any suspicious activity to the Financial Crimes Enforcement Network (FinCEN).
Given that DBS Bank operates a branch in California and transactions from Fubon and Chong Hing were routed through Liem’s Wells Fargo account, the lawsuit argues that these banks fall under US regulatory jurisdiction.
This communication forms the basis of the claim that banks have a legal obligation to act on the suspicious nature of these transactions.
Legal Implications and the Growing Threat of Crypto Fraud
The case also highlights the involvement of Hong Kong-based business firms—Richou Trade, FFQI Trade, Xibing, and Weidel—which allegedly deposited Liem’s funds into third-party accounts. These organizations are suspected of being intermediaries in this scam, acting as conduits for embezzling the stolen funds.
Notably, the case highlights the ongoing risks to the global financial system, especially in the context of cross-border cryptocurrency fraud schemes.
It raises questions about the responsibilities of banking institutions in preventing such frauds and ensuring compliance with international financial regulations. If the case goes ahead, it could be a precedent for holding banks accountable for failing to flag suspicious activity in crypto-related transactions.
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