Why Did a $20M Crypto Scam Happen at Citigroup? The Hidden Risk in 'Safe' Banks

The Bank That Failed to See the Warning Signs

I remember writing my first smart contract during a sleepless Brooklyn night—nervous, precise, terrified of one missing semicolon. But here’s the thing: real-world systems fail too. Not from bugs in code, but from silence in judgment.

Michael Zidell didn’t lose \(20 million because he was reckless. He lost it because Citigroup failed to act when 43 suspicious transfers—including nearly \)4 million funneled into Guju Inc.—triggered multiple red flags.

A Scam Built on Trust and Silence

The scam started on Facebook, not Ethereum—a classic ‘pig butchering’ operation disguised as an NFT investment opportunity with a fake persona named Carolyn Parker. By the time OpenrarityPro vanished overnight, Zidell had already sent millions across borders through accounts that should have raised alarms.

And yet… nothing.

Citigroup’s anti-money laundering (AML) systems should have flagged those large, repetitive transactions in whole numbers—especially when tied to shell companies like Guju Inc. But the bank didn’t investigate. They didn’t pause. They didn’t ask why someone would send almost half a million dollars in chunks to an obscure entity with no public record.

Why Banks Are Still Behind the Curve

As someone who once built DeFi protocols for underrepresented founders, I know how hard it is to build trust in decentralized ecosystems. But here’s what shocks me: centralized institutions—those we trust with our money—are still running on outdated guardrails.

Most banks treat blockchain activity as if it were traditional wire transfers—with little understanding of digital red flags like rapid cross-chain movement or sudden clustering of funds into dormant accounts.

This isn’t just negligence—it’s institutional blindness toward emerging threats that crypto innovators have been warning about for years.

The Real Cost Isn’t Just Financial — It’s Psychological

You don’t need to be a coder to feel betrayed by this outcome. When you lose life savings after believing your bank was watching your back? That breaks something deeper than faith in finance—it breaks faith in safety itself.

I’ve sat beside women developers who left tech after being dismissed as ‘too emotional.’ This lawsuit isn’t just legal—it’s emotional restitution for everyone who ever felt invisible when they tried to speak up.

And yes—I’ll admit: sometimes I still check my own transaction history at 2 a.m., wondering if this time, someone will notice before it’s too late.

What We Can Do Now — Beyond Blame

We need better oversight—not just lawsuits, but real-time monitoring tools integrated across banking and blockchain networks. Imagine AML systems trained on chain data streams instead of static forms filled out by exhausted compliance officers.

crypto regulation must evolve—not behind walls, but alongside innovation. And we—the builders, users, and dreamers—must demand transparency from institutions that claim to protect us.

You’re not paranoid if you question whether your bank sees what you see.