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Citibank Faces Lawsuit Over $20M crypto Pig-Butchering Scam: Are Banks the Last Line of Defense?
New York, Ny – Citibank is embroiled in a legal battle in Manhattan federal court after Michael Zidell accused the bank of negligence related to a staggering $20 million “pig-butchering” crypto scam. Zidell claims Citibank turned a blind eye to suspicious transactions, facilitating the devastating fraud.
The $20 Million Crypto Heist: Citibank’s alleged Oversight
Zidell’s lawsuit alleges that he made 43 transfers totaling $20 million, with nearly $4 million processed by Citibank through 12 wire transfers to accounts held by Guju Inc. The plaintiff asserts that the bank failed to conduct a proper inquiry, ignoring red flags such as large, round-numbered deposits and withdrawals that should have triggered alarms.
The scheme reportedly began in early 2023 when Zidell connected with a person on Facebook using the fake name “Carolyn Parker.” The individual persuaded him to invest in NFTs through a fraudulent platform called OpenrarityPro. Over several months, Zidell wired funds to various bank accounts, deceived by Parker’s excuse of high customer volume requiring multiple transfers.
By late April, the OpenrarityPro website vanished, along with Zidell’s entire $20 million investment. Zidell argues that Citibank’s failure to perform adequate fraud checks and its negligence directly enabled the scam.
Pro tip: Always verify the legitimacy of investment platforms and be wary of individuals who pressure you to make speedy decisions. Consult with a financial advisor before making any meaningful investments.
Explosion of Crypto scams: A Growing Threat
This lawsuit surfaces amid a global surge in cryptocurrency-related scams. Security firm Cyvers reported that in the past year, scammers stole over $5.5 billion across 200,000 identified cases. The FBI’s Internet Crime Complaint Center (IC3) documented losses nearing $9.3 billion across more than 190,000 complaints in 2024.
However, U.S. authorities, spearheaded by the Secret Service, have seized $225 million linked to pig-butchering scams in 2025, marking the agency’s largest cryptocurrency seizure to date.
Should Banks Be Held Accountable for cryptocurrency fraud?
Banks have a fundamental responsibility to protect their clients from fraud. However, fraudsters often find ways to slip through the cracks.
Earlier this year, Ken Liem filed a lawsuit in California against Fubon Bank, chong Hing Bank, and DBS Bank after losing nearly $1 million in a LinkedIn-based cryptocurrency fraud. Liem claims that inadequate KYC (Know your Customer) and AML (anti-Money Laundering) procedures, along with failure to report suspicious activity, facilitated the fraud. He is seeking $3 million in damages.
Did You Know? Pig butchering scams get their name from the practice of “fattening up” victims with attention and false promises before defrauding them of their money.
Conversely, not all courts readily assign liability to banks. In
