Citibank has been sued by a person claiming to be a victim of a cryptocurrency romance scam, alleging that the bank ignored warning signs that led to scammers making off with $20 million.
In a lawsuit filed Tuesday in Manhattan federal court, plaintiff Michael Zidell accuses Citibank of "turning a blind eye to its statutory duties and obligations," allowing him to deposit millions of dollars into accounts held by the scammers at the bank.
Zidell states that he conducted dozens of transactions through multiple banks, sending $20 million to the scammers, nearly $4 million of which flowed into accounts they held at Citibank.
The lawsuit claims that these transactions were part of a carefully orchestrated romance scam, commonly referred to as a "pig butchering" scheme, where scammers use fake identities to establish romantic online relationships with victims, luring them into fraudulent investment schemes.
Zidell says the scam began in early 2023 when he was contacted on Facebook by someone claiming to be a business owner named "Carolyn Parker." He developed a "friendly social relationship" with her, but later felt it evolved into a romantic relationship.
After a month of their relationship, Parker told Zidell he should invest in non-fungible tokens (NFTs), claiming she had made millions by doing so and directed him to a trading platform.
Zidell decided to invest in NFTs and transferred funds to various bank accounts provided by the trading platform. He was told that multiple banks were needed due to the large volume of customer deposits.
He stated that over the next few months, he sent 43 transfers to various bank accounts, totaling more than $20 million, but by the end of April, the platform's website "suddenly disappeared," along with his millions.
The lawsuit alleges that Citibank processed 12 transfers totaling about $4 million, which flowed to a company named Guju Inc.
The lawsuit also accuses the bank of ignoring "warning signs" in the Guju account, stating that "these included large integer amounts, which should have triggered the bank to investigate suspicious activity."
The lawsuit reads: "Citibank failed to implement adequate security measures, failed to detect obviously suspicious transactions, and failed to monitor the accounts, even as large integer amounts moved in and out of trust and other personal accounts in a suspicious manner."
Zidell claims that Citibank assisted and abetted the so-called scam and accuses the bank of negligence, stating it "had a duty to exercise due diligence in monitoring suspicious transactions."
Cointelegraph has reached out to Citibank for comment.
According to security firm Cyvers, in February, romance scammers stole over $5.5 billion in 200,000 confirmed cases last year.
Chainalysis estimated in February that various cryptocurrency scams had stolen about $9.9 billion in 2024, but this figure could rise to $12.4 billion as the analytics firm identifies more crypto wallets associated with scammers.
Earlier this month, U.S. authorities stated that they had seized $225 million related to pig butchering scams in an operation led by the Secret Service, marking the agency's largest cryptocurrency seizure ever.
Related: SoFi Digital Bank Relaunches Cryptocurrency Services After 2-Year Interruption
Original: “Citibank Accused of Ignoring Warning Signs of $20 Million Crypto Romance Scam”
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