According to Cointelegraph, Citibank is facing a lawsuit filed by Michael Zidell, who claims to be a victim of a crypto romance scam. Zidell alleges that the bank ignored warning signs that allowed scammers to abscond with $20 million. The lawsuit, filed in a Manhattan federal court, accuses Citibank of neglecting its statutory duties by permitting Zidell to deposit millions into accounts held by scammers at the bank.
Zidell's complaint details how he transferred $20 million through numerous transactions across various banks, with nearly $4 million going to Citibank accounts. The transactions were part of a sophisticated romance scam, often referred to as pig butchering, where scammers create a fake persona to establish a romantic online relationship with a victim, ultimately luring them into a fraudulent investment scheme. Zidell's ordeal began in early 2023 when he was contacted on Facebook by someone using the name "Carolyn Parker," who claimed to be a business owner. Their relationship evolved from friendly to romantic, and Parker eventually persuaded Zidell to invest in non-fungible tokens (NFTs), claiming she had made millions from them.
Zidell proceeded to invest in NFTs, transferring funds to various bank accounts provided by the trading platform Parker recommended. He was informed that multiple banks were necessary due to the high volume of customer deposits. Over the following months, Zidell made 43 transfers totaling over $20 million to different accounts. However, by late April, the trading platform's website vanished, along with his investments. The lawsuit accuses Citibank of processing 12 transfers amounting to approximately $4 million to a company named Guju Inc., and of ignoring "red flags" in Guju's accounts. The complaint argues that the large, round sums of money should have prompted the bank to investigate the suspicious activity.
Zidell claims Citibank failed to implement adequate security measures, detect suspicious transactions, and monitor accounts, despite the suspicious nature of the transfers. He accuses the bank of negligence, asserting that it had a duty to exercise due care in monitoring such transactions. Cointelegraph has reached out to Citibank for comment on the matter. Romance scams, like the one Zidell fell victim to, are a significant issue, with scammers stealing over $5.5 billion last year across 200,000 cases, according to security firm Cyvers. Chainalysis estimated that crypto scams accounted for around $9.9 billion in 2024, with potential losses rising as more scam-related crypto wallets are identified. U.S. authorities have already seized $225 million tied to pig butchering scams this year, marking the largest crypto seizure by the Secret Service.