Citibank Sued for $20 Million Over Alleged Crypto Scam Negligence

Citibank is facing a $20 million lawsuit filed by Michael Zidell, who alleges that the bank's negligence allowed a crypto scam to defraud him of his life savings. The lawsuit, filed in Manhattan federal court on June 24, 2025, claims that Citibank ignored 43 suspicious wire transfers totaling $20 million, which were sent to accounts controlled by scammers. The fraud involved a fake NFT investment scheme tied to a romance scam, where Zidell was convinced to invest in a fraudulent NFT site by an imposter posing as his romantic interest.

The complaint outlines Citibank’s failure to alert to suspicious operations on an account. The cash transfers made by Zidell, sometimes in huge amounts, found their way to accounts that were later traced as being fraudulent. According to the complaint, Citibank had fraud monitoring inefficiencies that prevented it from detecting suspicious activities. The lawsuit points out that the failure by the bank to investigate breached an act of the federal banking rules.

Citibank has not publicly responded to the allegations. The complaint lays claim to the policies of the bank, which should have instituted monitoring of the suspicious activities, yet the bank failed to do this. Other such incidents have brought the role of the banks in stopping financial fraud into question. This case implies the emergence of an increasing number of crypto scam cases, which have been on the rise in recent years. In 2024, the Federal Trade Commission estimated that the volume of losses to crypto fraud was approximately more than $3.7 billion, with romance scams being one of the most prevalent strategies. Criminals have been known to cause financial and mental trauma to victims who become vulnerable due to a sense of trust.

The case filed by Zidell demands both compensation and legal expenses, as it is supposed to make Citibank answerable for its negligence. The result may establish a precedent on the means in case of which a bank has to detect fraud on transactions in cryptocurrencies. According to legal experts, the pressure in the banking industry is growing among the authorities to put formidable anti-fraud mechanisms as digital currencies rise in popularity. The case also emphasizes consumer protection in Internet investment. Most often, scammers resort to advanced schemes such as false identities and fake websites to scam their victims. The case of Zidell is a lesson to anyone who intends to invest in cryptocurrency without carrying out due diligence.

The case is placed in the hands of Judge Tanya S. Chutkan in the U.S. District Court, Southern District of New York. There is no trial date yet, though the case is likely to bring publicity because of its massive financial value and implications of the case on the aspect of bank supervision. The action of the bank not protecting Zidell was irreparably harmful, according to the legal team of Zidell, but on the other hand, the bank of Citibank can argue that it was acting according to the usual practices. As the case unfolds, there can be heightened investigations into how financial institutions deal with crypto fraud. Cryptocurrency fraud is increasingly a problem, and regulators can be expected to increase efforts to enact tougher compliance Regulations to help keep consumers safe. The case on this matter may have a bearing on further policies and consumer safeguards in the banking industry.