A Massachusetts appellate court shut the door on an unusual legal battle in which customer Lourenco Garcia sought to hold Santander Bank responsible for a $751,000 loss he suffered in a cryptocurrency scam.
According to the court ruling, neither Santander’s customer agreement nor Massachusetts law requires the bank to block or investigate customer-authorized transactions, even when those transfers are tied to apparent fraud.
In the period from December 2021 to January 2022, Garcia made two debit card purchases and seven wire transfers from his checking and savings accounts to the Metropolitan Commercial Bank of New York.
The funds were subsequently used to purchase cryptocurrency via Crypto.com and a supposed trading platform called CoinEgg. However, Garcia later realized CoinEgg was a scam, leading to his $751,000 loss.
He sued Santander for breach of contract, negligent misrepresentation, and violating Massachusetts consumer protection law. The argument was that the bank should have spotted and stopped the high‑risk transactions.
The appeals panel, however, rejected all of Garcia’s claims. It pointed to Santander’s customer agreement, which states the bank may act when it suspects fraud—but isn’t obligated to do so. The court further emphasized that Massachusetts regulators have not imposed any blanket requirement for banks to monitor or block all potentially suspicious transactions.
Garcia also cited language on Santander’s website promising the bank would “contact a customer” about questionable activity. However, the court found that such marketing language was not a binding legal duty.
Critically, Garcia had personally authorized every transfer. He didn’t raise concerns with the bank until the funds were gone.
Though the court’s decision holds limited precedential weight, it delivers a clear message: banks are not financial guardians against crypto-related losses, especially when customer-approved transactions.
With crypto scams on the rise and regulatory scrutiny tightening, financial institutions are increasingly leaning on the exact terms of their customer agreements to shield themselves from liability.
As this case illustrates, individuals moving large sums into speculative digital assets must do their own due diligence and implement personal safeguards against fraud.
Garcia filed the original complaint in October 2022. After two years of legal back-and-forth—and decisions by both the Superior Court and the appeals court in Santander’s favor—his efforts to reclaim his lost fortune have ended in disappointment.
Crypto scam losses explode 6,499% in 2025 as regulators tighten grip on Web3 projects
This ruling is particularly timely, as crypto scams have been on the rise, and regulators are intensifying their scrutiny of digital asset markets.
Data shows that crypto rug pulls wiped out nearly $6 billion in Q1 2025, up 6,500% from just $90 million a year earlier.
Web3 projects have lost nearly $6 billion to rug pulls since the beginning of 2025, a 6,499% increase from the $90 million recorded during the same period last year, according to a new DappRadar report.
As DappRadar’s blockchain analyst Sara Gherghelas notes, a single case accounts for most of the damage, as 92% of the amount “is tied to the Mantra incident,” which she describes as “one of the largest individual scams recorded in recent years.”
Your crypto news deserves attention - KEY Difference Wire puts you on 250+ top sites
