Court Rules Santander Not Liable For $751,000 Crypto Scam Loss

In a recent court ruling, Santander Bank was found not liable for a $751,000 loss suffered by a Massachusetts resident who fell victim to a cryptocurrency scam. The case involved a man named Garcia who, between December 2021 and January 2022, made two debit card purchases and seven wire transfers from his Santander accounts to the Metropolitan Commercial Bank of New York. These funds were subsequently used to buy cryptocurrency through Crypto.com and a fraudulent trading platform called CoinEgg.

Garcia later discovered that CoinEgg was a scam, but by then, the money was already gone. He sued Santander, claiming the bank should have flagged and blocked the suspicious transactions. However, the court ruled that Santander’s customer agreement does not require the bank to stop or investigate authorized transactions, even if they are tied to fraud. The judges also noted that Massachusetts law does not obligate banks to monitor or block all suspicious activity.

Garcia argued that Santander’s website suggested the bank would “contact customers” about questionable activity. The court, however, ruled that this was merely marketing language and not a binding promise. The fact that Garcia had personally authorized every transfer and did not report any concerns to the bank until it was too late worked against him.

This ruling comes at a time when crypto scams are on the rise. According to DappRadar, scam losses jumped 6,499% in the first quarter of 2025 compared to the same period in 2024. A staggering $6 billion has been lost so far in 2025 due to crypto rug pulls, with a single event, the Mantra incident, responsible for 92% of that total. Blockchain analyst Sara Gherghelas noted that this makes it one of the biggest scams in recent years.

The message from this case is clear: banks are not financial guardians, especially when it comes to crypto. If you approve a transaction, the bank may not be required to protect you, even if fraud is involved. The ruling underscores the importance of individual responsibility in cryptocurrency transactions and the challenges banks face in protecting customers from fraudulent activities.

To stay safe, always double-check who you’re sending money to, be skeptical of too-good-to-be-true platforms, and don’t rely on your bank to stop a scam in progress. Crypto may offer big returns, but it comes with big risks, and it’s up to you to stay safe. The case serves as a reminder that while cryptocurrencies offer new opportunities for investment and financial innovation, they also come with unique challenges and risks.

The decision by the Massachusetts intermediate appellate court has set a precedent for future cases involving cryptocurrency scams and the liability of financial institutions. It emphasizes the need for increased vigilance and education among consumers regarding the risks associated with cryptocurrency investments. Banks and financial institutions must also enhance their security measures and customer education programs to mitigate the risks of fraudulent activities.

As the use of cryptocurrencies continues to grow, it is essential for all stakeholders to work together to address these challenges and ensure the safety and security of cryptocurrency transactions. The ruling highlights the complexities of the legal landscape surrounding cryptocurrencies and the need for enhanced security measures and customer education to protect against fraudulent activities.