Massachusetts Appeals Court Dismisses Lawsuit Against Santander Bank
In a significant ruling, the Massachusetts Appeals Court has dismissed a lawsuit against Santander Bank, N.A., concerning a customer’s loss of over $750,000 tied to a cryptocurrency scam. On April 18, the court upheld a previous decision from November 2023 by the Superior Court, which determined that the plaintiff, Lourenco Garcia, did not present a sufficient legal claim based on the state’s civil procedure guidelines.
Details of the Case
Garcia had accused Santander of neglecting to intervene during multiple transactions that he authorized, which ultimately linked to a fraudulent crypto exchange called Coinegg. His transactions took place between December 13, 2021, and January 4, 2022, including two credit card purchases through Crypto.com, along with seven wire transfers at various Santander locations, cumulatively amounting to $751,500. These funds were funneled via an account held at Metropolitan Commercial Bank of New York to acquire cryptocurrency, which was then sent to Coinegg. After realizing that the platform was fraudulent, Garcia found himself unable to retrieve any of the funds.
Court’s Rulings and Reasoning
In his defense, Garcia pointed to specific clauses within Santander’s Personal Deposit Account Agreement and statements on its website that suggested the bank would alert customers if it spotted transactions exhibiting typical fraudulent patterns. However, the Appeals Court ruled that these statements did not impose a binding obligation on Santander to stop or inquire about the transactions executed by Garcia. The judges clarified that while the agreement mentions that Santander “may decline or prevent any or all transactions,” it does not require the bank to take action against transactions that have been expressly authorized by customers.
Moreover, the court noted that Garcia failed to prove any breach of contract or articulating terms that would hold the bank accountable for the losses incurred. The judges asserted that the language on the Santander website does not constitute a legally enforceable assurance, nor does it support claims of negligent misrepresentation or violations under Massachusetts law.
Cryptocurrency Sector Updates
In other news from the cryptocurrency sector, Binance has announced a new compliance initiative in India aimed at enhancing security and meeting stringent anti-money laundering (AML) laws. Starting April 18, all users of the Binance platform in India will be required to complete a re-verification of their Know Your Customer (KYC) details, a move that affects both new and existing customers.
This decision comes amid a broader regulatory drive urging cryptocurrency platforms, whether local or international, to tighten their user verification processes. As part of its compliance measures, Binance highlighted that personal identification details, such as the Permanent Account Number (PAN), would be collected to align with Indian regulations. The exchange reassured users about the careful handling of their data, emphasizing its commitment to fighting financial crime and fostering a secure digital asset ecosystem. This re-verification process is not limited to Binance; it applies across the board to all exchanges operating under Indian AML legislation, which mandates compliance from all registered platforms.
