Crypto Scam Victim Sues Banks for £20 Million Loss

Michael Zidell has taken legal action against East West Bank and Cathay Bank, claiming negligence that led to a staggering $20 million loss in a complex cryptocurrency scam. Issues of banking oversight are in the spotlight now.

Zidell’s Claims Against the Banks are Serious

Michael Zidell, a victim of a complex cryptocurrency scam, has turned to the courts for justice, filing lawsuits against East West Bank and Cathay Bank. He claims these financial institutions failed utterly to detect and prevent fraudulent transactions, which ultimately cost him a staggering $20 million. This recent legal action follows an earlier lawsuit Zidell lodged against Citibank on June 24, 2025, in New York, where he alleged similar negligence in flagging suspicious activities. It’s a high-stakes case that highlights the challenges banks face in monitoring transactions, especially in the ever-evolving landscape of cryptocurrency.

Pig Butchering Scheme Details

According to the details in the lawsuits, Zidell is said to have sent around $7 million in 18 separate bank transfers to an East West Bank account and over $9.7 million through 13 transfers to Cathay Bank. These transactions came on the back of a previous $4 million wired into Citibank accounts earlier. In total, this adds up to the full $20 million lost due to a so-called pig butchering scheme that has become increasingly prevalent. Zidell’s lawsuits were formally filed in a California federal court on July 1, 2025, citing that the banks completely ignored suspicious activity, particularly given the large amounts involved that should have warranted more scrutiny.

Background of the Scam Unfolding

The initial phase of this fraud kicked off in January 2023, when Zidell got an unsolicited message on Facebook from someone claiming to be Carolyn Parker, a businesswoman. Over a series of WeChat video calls and messaging exchanges, Parker gained Zidell’s trust and managed to persuade him to invest in a fraudulent NFT site that went by the name OpenrarityPro.com. By April 2023, that website was taken down, leaving Zidell with zero access to his funds. This whole ordeal raises serious questions about the accountability of financial institutions.

Legal Framework and Allegations against Banks

In legal filings, Zidell contends that both banks did not meet their obligations under federal laws such as Know Your Customer and Anti-Money Laundering. He argues that these institutions allowed the scammers to operate without hindrance, as they opened accounts and processed large transfers without properly questioning the transactions’ legitimacy. Moreover, the lawsuits also include allegations related to elder abuse, even though Zidell’s age has not been disclosed. California laws protect individuals aged 65 and over from such abuse, hinting that Zidell might be eligible for those protections.

Failures in Monitoring Transaction Activity

For example, Zidell’s transactions reportedly included 12 transfers to a company called Guju Inc., whose official documents suggested it wouldn’t exceed a monthly wire activity limit of $250,000. Strikingly, the first transfer Zidell made was larger than Guju’s claimed annual revenue, yet Citibank seemingly overlooked this glaring inconsistency. Similarly, East West and Cathay Bank also failed in their duty to monitor high-value transactions, allowing the fraud scheme to proceed without any significant roadblocks.

The Wider Implications of Zidell’s Case

Amid all this, Zidell has reached out to both the Dallas Police Department and the FBI, yet developments in the investigation have been quite sluggish. Notably, the Secret Service managed to seize cryptocurrencies valued at $225 million that were tied to schemes like the one Zidell fell victim to. His case is more than just an individual tragedy; it signifies a mounting pressure on financial institutions to bolster their fraud detection measures. If Zidell’s case succeeds, it may pave the way for greater accountability in banking and possibly set a new legal precedent regarding customer protection against sophisticated crypto fraud.

In summary, Michael Zidell’s lawsuits against East West Bank and Cathay Bank highlight significant failures in the banking system regarding fraud detection in cryptocurrency scams, leading to major financial losses. The legal accusations suggest a broader issue with accountability in financial institutions. As the situation evolves, it could have far-reaching effects not just for Zidell, but also impact policies around safeguarding customers in the future.