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Ken Liem’s lawsuit against three Asian banks highlights serious flaws in anti-fraud measures in the cryptocurrency industry.
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This case reflects changing concerns about crypto fraud; It is particularly noteworthy that “pig slaughter” scams are rapidly increasing and becoming more sophisticated.
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According to Cyvers, “The rise of access control violations and modern scams like Pig Butchering underscore the importance of implementing AI-powered risk assessment tools.”
A Californian man has filed a $1 million fraud lawsuit against three Asian banks, alleging negligence in KYC and AML checks, amid increasing fraudulent activity.
Legal Action After $1 Million Crypto Fraud
In an important legal development, Ken Liem’s lawsuit highlights the growing problem of crypto-related fraud. Reportedly, Liem was the victim of a “pork slaughter”, in which fraudsters gradually establish contact with their targets and then steal large sums of money from them.
In June 2023, Liem was contacted by LinkedIn scammers, who convinced him to make large investments in seemingly profitable cryptocurrency opportunities. Within a few months, Liem had transferred almost $1 million, believing that his investments were safe.
According to court documents, the investigation revealed that the funds were based in Hong Kong. Fubon Bank Limited is based in the United States, What is the dividend yield of Chong Hing Bank Limited? and Singapore DBS Bank Limited is based in the United States It revealed that it was transferred to three banks in Asia. Transferring funds to third-party accounts allegedly facilitates fraud.
Consequences of Violation of US Bank Secrecy Act
Liem’s lawyers argue that the banks involved did not pay enough attention to important Know Your Customer (KYC) and anti-money laundering (AML) protocols that can identify and report fraudulent activity. Failure to implement these basic controls is a serious deficiency, especially in light of US bank secrecy legislation.
This law requires financial institutions to report suspicious activity and maintain complete transaction records. Since DBS has a branch office in California, it is subject to this regulation. Also, Fubon and Chong Hing process transactions through Liem’s Wells Fargo account, making them even more liable for negligence claims.
The lawsuit demands a jury trial, and Liem is seeking at least $3 million in damages representing his losses and the broader impact of inadequate banking regulations.
Increasing Crypto Fraud Trends
The case comes at a time when crypto fraud has become alarming. According to reports, such fraud will happen only in 2024. $2.3 billionIt caused more losses than this worrying trend, the “pig slaughter” scam accounts for approx $3.6 billion the countryside
This increase shows a significant lack of safe practices and protective measures, which allows such scams to spread unchecked.
Need for Increased Security Measures
The rise of these modern scams shows the need to strengthen security measures in the crypto world, industry experts have found. The Web3 security company Cyvers highlights the importance of solutions supported by artificial intelligence that will provide a better risk assessment and detect fraudulent transactions early.
“The rise of modern fraud such as access control violations and Pig Swine underscores the importance of implementing AI-powered risk assessment, customer authentication and fault detection tools,” said Cyvers. he said. This process is very important to adapt to the changing tactics of fraud.
Conclusion
The consequences of the Ken Liem case go beyond personal loss; It highlights the system problems of banking applications in terms of cryptocurrency transactions. As the world becomes increasingly digital, banks need to recognize their role in fraud prevention. Strong enforcement of KYC and AML regulations and advanced technology solutions are critical to protecting consumers and maintaining trust in the cryptocurrency ecosystem.
