Citibank is facing a lawsuit from Michael Zidell, who claims the bank failed to act on warning signs of a fraudulent scheme that led to a loss of $20 million.
Victim Claims Citibank Overlooked Scam Warnings
In the lawsuit filed in Manhattan federal court, Zidell alleges that Citibank did not fulfill its duty to detect and stop suspicious activity. He became a victim of a scheme known as 'pig butchering,' where fraudsters create fake romantic connections to lure victims into fraudulent cryptocurrency investments.
Bank Negligence at the Heart of Lawsuit
Zidell points to 12 specific transfers totaling $4 million that the bank processed to a company named Guju Inc. He claims Citibank ignored multiple red flags on Guju's accounts, including large, repetitive fund movements. 'Citibank failed to implement sufficient security protocols and allowed clearly suspicious transactions to proceed,' the complaint states.
Rise of Crypto Scams in the U.S.
This case brings attention to the scale of romance-based cryptocurrency scams. In 2023 alone, such scams reportedly siphoned over $5.5 billion from victims. Analytics firm Chainalysis has projected that total crypto-related scams may reach $12.4 billion in 2024.
The lawsuit against Citibank emphasizes the need for stricter oversight of financial transactions and user protection from fraud in the rapidly growing crypto industry.
