Court Ruling Highlights Bank Responsibilities in Crypto Scam Cases

A Massachusetts court ruled against Lourenco Garcia, who sued Santander Bank for $751,000 lost in a crypto scam, stating that banks have no legal duty to prevent customers from authorising fraudulent transactions. This case highlights a broader trend of rising crypto scams, indicating the need for personal vigilance in cryptocurrency investments.

In a recent legal matter, a Massachusetts appellate court dismissed a case against Santander Bank concerning a $751,000 crypto scam. Lourenco Garcia, the customer, argued that Santander should have blocked his fraudulent transactions following a series of payments made to the trading platform CoinEgg, which turned out to be a scam.

Between December 2021 and January 2022, Garcia authorised multiple transfers from his Santander accounts to Metropolitan Commercial Bank. These funds were then directed towards purchasing cryptocurrency via Crypto.com and CoinEgg. After discovering CoinEgg’s fraudulent nature, he sought to recover his losses, claiming Santander had failed to protect him from these transactions.

Garcia’s lawsuit included allegations of breach of contract and negligent misrepresentation but was ultimately rejected by the court. The ruling stated that Santander was not legally obliged to prevent or investigate transactions even if they were suspected to be fraudulent. The judges clarified that customers bear responsibility for authorised payments, and Massachusetts law does not require banks to monitor such activities.

Additionally, Garcia referenced Santander’s website which implied that the bank would alert customers about suspicious activity. However, the court viewed this as non-binding marketing language that did not necessitate actionable duty from the bank.

This ruling arrives during a notable increase in crypto scams, with DappRadar reporting a staggering 6,499% rise in scam-related losses in 2025 compared to the previous year. Notably, $6 billion has been lost due to scams in 2025, significantly exacerbated by a major incident termed the Mantra affair.

The key takeaway from this case stresses that banks may not act as safeguards against fraudulent transactions. Users are urged to verify recipient legitimacy, remain sceptical of enticing platforms, and take personal responsibility for their financial safety in the crypto landscape.