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Citibank faces a lawsuit in Manhattan federal court after plaintiff Michael Zidell accused the bank of “turning a blind eye” to suspicious transactions tied to a $20 million crypto pig-butchering romance scam.
Zidell alleged that he sent $20 million in 43 transfers, nearly $4 million of which Citibank processed through 12 wires to accounts held by Guju Inc.
According to his filing, the bank allegedly failed to conduct an investigation. Large, round-numbered deposits and withdrawals should have triggered alarms at Citibank. They didn’t.
The complaint revealed that the scheme began in early 2023.
Zidell met a woman on Facebook who went by the fictitious name “Carolyn Parker.” She convinced him to invest in NFTs through a fake platform called OpenrarityPro.
Over months, Zidell wired funds to multiple bank accounts, believing the excuse Parker gave him that high customer volume required extra transfers.
By late April, the website and his $20 million investment vanished.
Zidell claims that Citibank failed in its duty by processing these transactions without proper fraud checks, ignoring suspicious activity. And in doing so, the mega bank enabled the scam through negligence.
This lawsuit arrives as crypto scams explode worldwide.
Security firm Cyvers reports scammers stole over $5.5 billion across 200,000 identified cases last year.
Moreover, the FBI’s Internet Crime Complaint Center (IC3) reported losses totaling approximately $9.3 billion across more than 190,000 complaints in 2024.
In response, U.S. authorities, led by the Secret Service, have already seized $225 million tied to pig-butchering scams in 2025, the agency’s largest-ever crypto haul.
Banks bear a fundamental responsibility to safeguard their clients and the assets in their care from fraud, yet fraud continues to slip through.
Earlier in the year, Ken Liem filed a lawsuit in California against Fubon Bank, Chong Hing Bank, and DBS Bank after nearly $1 million vanished in a LinkedIn-driven cryptocurrency fraud.
He contends that inadequate KYC/AML procedures and a failure to flag or report red-flag activity under the U.S. Bank Secrecy Act paved the way for the deception, and he’s seeking $3 million in damages at trial.
Yet not every court is quick to pin liability on banks.
The Eleventh Circuit upheld summary judgment in favor of Wells Fargo in a lawsuit in July 2024. GSR Markets filed the lawsuit. The court ruled that the bank had no duty to close an account tied to a Bitcoin scam absent clear evidence of negligence.
That decision may temper future efforts to hold financial institutions accountable without demonstrable breach.
Still, when banks and law enforcement join forces, they can disrupt fraudsters and deliver justice.
In a related development, Australian authorities dismantled a $124 million crypto laundering scheme in June. Four suspects were indicted, and over $13 million was frozen.
Also on April 7, U.S. authorities arrested Nigerian national Charles Nwadavid at Dallas Fort Worth Airport, charging him with mail fraud and money laundering in a $2.5 million crypto romance scheme, underscoring how collaboration can expose criminals and protect victims.
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