Citibank Sued Over Alleged Negligence in Handling $20M Crypto Romance Scam
Citibank faces a lawsuit alleging it ignored red flags that should have helped prevent scammers from defrauding a victim ofapproximately $20 million during a sophisticated crypto romance scam, commonly known as “pig butchering.”
Filed on Tuesday in a Manhattan federal court, the complaint was filed by Michael Zidell, who claims Citibank violated its “statutory duties and obligations” by failing to stop transactions sent to the scammer accounts held at the bank.
Zidell alleges he lost the money following an online romance initiated on Facebook in early 2023 with a person identifying themselves as “Carolyn Parker.” This supposed business owner, according to Zidell, led him to believe a romantic relationship could develop.
After “months of conversation” during which Parker allegedly professed her success investing in NFTs, Zidell was directed to a trading platform named “OpenrarityPro.” The platform allegedly instructed him to transfer deposits through several banks due to high customer volume.
Zidell reportedly made 43 transfers totalling over $20 million, an amount prosecutors described as hindering analysis at the platform level. Citibank was specifically accused of processing approximately $4 million of these transfers, routed through the company Guju Inc.
Xidell’s lawsuit contends Citibank exhibited a pattern of failures, accusing the bank of:
- Failing to implement adequate security measures regarding the transactions
- Failing to detect clearly suspicious activities
- Not monitoring the Guju Inc accounts despite unusual patterns, including “large, round numbers” of funds combined with transfers from trusts and individuals taking place in a “suspicious manner.”
The complaint states Citibank aided the scam and failed to exercise the “due care” expected in monitoring suspicious transactions. Citibank has not provided a statement for this report.
The lawsuit accuses Citibank of aiding and abetting the alleged fraud, arguing the bank had “a duty to exercise due care in monitoring suspicious transactions.” Zidell filed the case seeking unspecified damages.
Romance scams, particularly the pig butchering variant against which Zidell contends, are a major problem globally. According to data cited by Cointelegraph, last year alone saw over $5.5 billion stolen via romance scams impacting upwards of 200,000 cases. Overall crypto-related scams in 2024 cost victims globally an estimated $9.9 billion (or potentially more, $12.4 billion), though these figures don’t exclusively break out the romance scam subset.
