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SEC wins $5.4M judgment in NanoBit crypto fraud case
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- DeepHorus
The US Securities and Exchange Commission has secured a $5.4 million judgment against crypto platform NanoBit Limited and its affiliates for defrauding at least 18 investors between 2023 and 2024. The final judgment, entered by the US District Court for the Eastern District of New York on June 16, comes nearly two years after the SEC first filed its complaint. The ruling marks another victory in the SECâs ongoing crackdown on crypto-themed fraud under the Trump administration, even as the agency has softened its regulatory stance toward legitimate crypto companies.
According to the SEC, NanoBit operators impersonated financial professionals in WhatsApp groups to lure investors into depositing funds on a fake trading platform. The platform displayed a fake dashboard showing rising returns, creating the illusion of profitable trading. However, no actual trades occurred, and investor funds were instead diverted to scheme participants. The SEC alleged that more than $2 million was wired to bank accounts in Hong Kong, while hundreds of thousands in crypto assets were misappropriated.
The court ordered NanoBit to pay a $1.18 million civil penalty, disgorgement of over $532,000, and prejudgment interest of nearly $81,200, totaling nearly $1.8 million. Three affiliatesâRadiant Horizons, Sweet Karma, and Zhao Deliâwere each fined $1.18 million. One of the main orchestrators, Jiajie Liu, was ordered to pay about $120,000 in penalties, disgorgement, and interest. The defendants were also permanently enjoined from future securities law violations.
The scheme relied heavily on social media to recruit victims. Investors were initially contacted on Instagram and then added to WhatsApp groups, where they were shown fake returns and promised substantial profits from initial coin offerings. The perpetrators falsely claimed that an affiliate, NanobitUS Securities, was an SEC-registered broker to build credibility. When investors tried to withdraw funds, they faced excuses and requests for large fees; some were removed from the groups for questioning the platformâs legitimacy.
This case is part of a broader pattern of SEC enforcement actions against crypto fraud. On May 29, the SEC charged a Texas man with raising over $12 million from 150 investors through false claims about AI-powered trading bots. In April, the SEC charged crypto executive Donald Basile and two companies with raising roughly $16 million via fraudulent claims about a token called Bitcoin Latinum. These actions demonstrate that despite a more relaxed approach to crypto regulation, the SEC remains vigilant against outright fraud.
Industry experts note that such cases highlight the persistent risks facing retail investors in the crypto space. The use of social media and messaging apps to target victims is a growing trend, as seen in other scams exploiting demand for event tickets. The SECâs ability to win substantial judgments and permanent injunctions sends a strong deterrent message, though recovering stolen funds remains challenging.
Looking ahead, the SECâs dual approachâcracking down on fraud while easing compliance burdens for legitimate projectsâmay continue to shape the crypto landscape. Investors are advised to verify platform registrations and remain skeptical of unsolicited investment offers. As AI tools become more sophisticated, regulators warn that fraudsters may adopt even more convincing tactics to exploit cryptoâs pseudonymous nature.
