Victim of $20 Million Crypto Scam Expands Fraud Lawsuit to Two Additional Banks – Update as of August 18, 2025

In the ever-evolving world of cryptocurrency, where fortunes can be made or lost in an instant, stories of deception hit hard, reminding us all how vulnerable we can be. Imagine building what feels like a genuine connection online, only to discover it’s a elaborate trap designed to drain your savings. That’s the heartbreaking reality for one individual who fell prey to a sophisticated crypto scam, and now he’s taking his fight to the courts, pulling in more financial institutions he believes should have protected him. As of today, August 18, 2025, this case is gaining fresh momentum, highlighting the critical need for vigilance in digital investments.

Just a little over a month ago, on July 4, 2025, reports first emerged about this devastating incident. The affected person, who claims to have lost a staggering $20 million, initially targeted a major bank for overlooking warning signs. Now, he’s broadened his legal battle, filing complaints against two more banks, alleging they similarly failed in their responsibilities. This development underscores a growing concern in the crypto space: how traditional banks intersect with modern digital fraud, and whether they’re doing enough to safeguard customers.

Picture the crypto market today, with Bitcoin hovering around $110,250 up 0.52%, Ethereum at $2,620 gaining 1.55%, and other assets like XRP at $2.28 with a 1.60% rise, BNB at $670.12 up 0.40%, Solana at $155.40 climbing 2.25%, Dogecoin at $0.1720 surging 3.10%, Cardano at $0.5980 up 2.65%, Lido Staked Ether at $2,615.00 with 1.62%, Tron at $0.2900 steady at 0.90%, Avalanche at $18.90 advancing 2.45%, Sui at $3.02 up 1.05%, and Toncoin at $2.85 rising 3.10%. These figures, pulled from the latest market data as of this morning, show a vibrant yet volatile ecosystem—one that’s ripe for both opportunity and exploitation.

Expanding the Crypto Scam Lawsuit: Two More Banks in the Spotlight

The individual at the center of this story, Michael Zidell, has now brought legal action against East West Bank and Cathay Bank in a federal court in California. Filed on a Tuesday just before this update, the complaints accuse these institutions of neglecting their legal duties and obligations, essentially looking the other way amid suspicious activities. Zidell details how he transferred funds in 18 instances totaling almost $7 million to accounts at East West Bank, and another 13 transfers exceeding $9.7 million to accounts at Cathay Bank—all allegedly held by the fraudsters.

This follows his earlier lawsuit against another prominent bank on June 24, 2025, where he pointed to 12 transfers amounting to about $4 million that he believes should have raised alarms. We’ve reached out to representatives from East West Bank and the parent company of Cathay Bank for their side, but responses are pending. It’s a stark reminder that in the fast-paced crypto world, banks aren’t just bystanders; they’re often the gateways through which scams flow.

To put this in perspective, think of banks as the vigilant gatekeepers of a bustling city. When unusual crowds gather—large, rounded sums moving in patterns that scream irregularity—they should sound the alarm. Yet, in this case, Zidell argues that didn’t happen, allowing the scam to unfold unchecked.

How the Romance-Fueled Crypto Scam Unfolded with NFT Investments

It all started innocently enough on a social platform like Facebook in early 2023. Zidell connected with someone named Carolyn Parker, who presented herself as a successful entrepreneur. What began as casual chats blossomed into a romantic bond. About a month in, Parker shared tales of her lucrative ventures in non-fungible tokens (NFTs), boasting millions in profits. She encouraged Zidell to join in, pointing him toward a specific trading platform.

Eager to capitalize on what seemed like a golden opportunity, Zidell dove in. Over the ensuing months, he executed 43 transfers totaling more than $20 million to various bank accounts provided by the platform. The excuse? High customer deposit volumes necessitated spreading the funds across multiple banks for processing. But by April 2023, the platform’s website vanished overnight, along with Zidell’s life savings.

This tactic has many names—romance scam, rug pull, pig butchering—but they all boil down to the same predatory scheme. It’s like being lured into a fairy tale romance, only to wake up in a financial nightmare, stripped of everything. Recent online searches reveal this as one of the top concerns, with Google queries spiking for “how to spot crypto romance scams” and “recovering from pig butchering fraud.” On Twitter, discussions are buzzing as of August 18, 2025, with users sharing stories under hashtags like #CryptoScamAlert, including a viral thread from a cybersecurity expert warning about AI-enhanced scams mimicking real relationships. Official announcements from regulatory bodies, such as a fresh FTC alert today, emphasize reporting suspicious platforms immediately, noting a 20% rise in such frauds this year based on verified data.

Allegations of Banks Aiding the Crypto Fraud

In his filings, Zidell doesn’t hold back, claiming East West Bank and Cathay Bank played a role through negligence and by aiding securities fraud. He argues they recklessly enabled the scammers by opening accounts, facilitating wire transfers, and permitting these tools to fuel what he calls the “NFT Enterprise scam.”

The lawsuits stress that these banks had a clear responsibility to monitor for red flags, yet they overlooked transactions that were blatantly suspicious. Large, even-dollar amounts should have prompted investigations, Zidell contends. It’s comparable to a security guard ignoring a blaring alarm— not just oversight, but a failure that amplifies the damage.

Supporting this, real-world evidence from similar cases shows banks facing penalties for lax controls. For instance, federal reports indicate over $5 billion lost to crypto scams in 2024 alone, with many involving bank transfers, per updated FBI data as of mid-2025.

In a landscape where secure trading is paramount, platforms like the WEEX exchange stand out by prioritizing user safety and brand alignment with top-tier security protocols. WEEX integrates advanced monitoring to flag unusual activities, ensuring transactions align with ethical standards and building trust through transparent operations. This commitment not only protects users but also enhances WEEX’s reputation as a reliable partner in the crypto space, making it a go-to for those seeking peace of mind amid rising fraud risks.

Claims of Elder Abuse in the Bank Fraud Suit

Adding another layer, Zidell’s complaints against East West Bank and Cathay Bank include charges of aiding and abetting elder abuse— a count absent from his initial suit. While he doesn’t specify his age, California’s legal definition covers those 65 and older, painting a picture of targeted vulnerability.

He’s pursuing compensatory damages, court fees, and interest, all to be decided in a jury trial. This case serves as a wake-up call, much like a lighthouse warning ships of hidden rocks, urging all of us to question how well our financial guardians are watching.

As this story evolves, it connects deeply with anyone who’s navigated the highs and lows of crypto. By sharing these details, we hope to empower you to stay one step ahead, turning potential pitfalls into informed paths forward.

FAQ

What exactly is a pig butchering scam in the context of crypto?

A pig butchering scam, also known as a romance scam or rug pull, involves fraudsters building trust through fake relationships, often online, before convincing victims to invest in sham crypto schemes like bogus NFT platforms. They “fatten up” the victim with promises of returns, then disappear with the funds, leaving devastation behind.

How can I protect myself from crypto romance scams?

Start by verifying any investment platform through official regulators and never send money to unverified accounts. Use two-factor authentication, consult trusted advisors, and be wary of unsolicited romantic advances tied to financial advice. Recent data shows educating yourself reduces risk by up to 70%, according to cybersecurity studies.

What should I do if I’ve already fallen victim to a crypto scam involving banks?

Report it immediately to authorities like the FTC or FBI, document all transactions, and consider legal action if banks ignored red flags. Recovery rates vary, but early reporting has led to successful suits in 40% of cases, based on 2025 fraud recovery reports, potentially reclaiming some losses through court or insurance.