A $750,000 crypto fraud lawsuit just hit a wall as the court ruled Santander had zero legal duty to stop authorized transactions, despite scam claims.
Santander Bank Not Liable for Customer’s $750K Crypto Loss, Court Confirms
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Court Shuts Down $750K Crypto Lawsuit Against Santander Over Fraud Losses
The Massachusetts Appeals Court, in an unpublished decision, affirmed on April 18 the dismissal of a lawsuit brought by Lourenco Garcia against Santander Bank, N.A., rejecting his attempt to recover over $750,000 lost in a cryptocurrency scam.
The court upheld a November 2023 Superior Court ruling that found Garcia’s amended complaint did not state a viable legal claim under Massachusetts Rule of Civil Procedure 12(b)(6). Garcia had sought to hold Santander liable for allegedly failing to intervene when he authorized a series of large transactions later linked to a fraudulent crypto platform called Coinegg.
According to Garcia’s allegations, between Dec. 13, 2021, and Jan. 4, 2022, he made two online card purchases through Crypto.com and initiated seven wire transfers at Santander branches, all totaling $751,500. These funds were routed through an account at Metropolitan Commercial Bank of New York and used to purchase cryptocurrency, which was eventually sent to Coinegg. Garcia stated that the Coinegg platform turned out to be a scam, leaving him unable to recover the funds. In support of his case, Garcia cited provisions in Santander’s Personal Deposit Account Agreement and its website, including one that read:
If we see any transactions that follow patterns fraudsters typically use, we will text you or email you to ask whether or not you authorized the transactions.
The Appeals Court panel concluded that these statements did not impose a duty on Santander to halt or question the transactions. The court stated:
The Agreement states that Santander ‘may decline or prevent any or all transactions,’ but does not obligate Santander to do so.
The judges emphasized that Garcia had authorized every transaction himself and had not identified any contract terms or legal duty breached by the bank. Additionally, the court found that the website language did not amount to an enforceable promise and that Garcia failed to allege false or deceptive conduct required to support claims of negligent misrepresentation or violations of Massachusetts General Laws Chapter 93A.
