- SEC wins $5.4M judgment as NanoBit crypto fraud case ends with court penalties.
- Fake WhatsApp trading groups allegedly misled investors with false profit dashboards.
- SEC says investor funds were diverted instead of being used for crypto trading activities.
The U.S. Securities and Exchange Commission (SEC) has secured a final court judgment in its fraud case against NanoBit Limited and several related defendants, concluding an enforcement action alleging that investors were misled by a fake cryptocurrency trading platform.
The ruling follows claims that at least 18 investors lost hundreds of thousands of dollars between 2023 and 2024 after being persuaded to deposit money into what the SEC described as a fraudulent operation.
According to the regulator, victims were approached through social media and WhatsApp before being shown fake investment returns that encouraged additional deposits. The judgment, entered by the U.S. District Court for the Eastern District of New York on June 16, imposes more than $5.4 million in combined monetary penalties across the defendants.
Court Orders More Than $5.4 Million in Penalties
The SEC announced the outcome, stating that the court found four entities and two individuals connected to NanoBit liable for violating U.S. securities laws. The judgment also permanently bars the defendants from engaging in securities-related conduct.
As part of the financial penalties, NanoBit Limited was ordered to pay a $1.18 million civil penalty, refunds totaling more than $532,000, and nearly $81,200 in prejudgment interest. Together, those payments total almost $1.8 million.
The court also imposed separate $1.18 million civil penalties on NanoBit affiliates Radiant Horizons, Sweet Karma, and Zhao Deli. In addition, Jiajie Liu, identified by the SEC as one of the alleged organizers of the scheme, was ordered to pay approximately $120,000 in penalties, disgorgement, and prejudgment interest.
SEC Details How the Alleged Scheme Operated
According to the SEC, the alleged fraud began when investors were contacted through social media platforms, including Instagram. They were then invited into WhatsApp groups where individuals posed as financial professionals and promoted NanoBit as a cryptocurrency investment platform.
The regulator said investors were directed to deposit funds on the platform, where they viewed dashboards displaying false trading profits. The SEC alleged that those figures were intended to create the impression that investments were growing, even though no genuine trading activity occurred.
The complaint also alleged that NanoBit falsely claimed an affiliated company, NanobitUS Securities, was registered with the SEC as a broker. The platform further promoted fake initial coin offerings, promising high returns on investment.
In its September 2024 complaint, the SEC alleged that investor funds were not used for cryptocurrency trading. Instead, the regulator said the money was transferred to individuals involved in the scheme, including bank accounts in Hong Kong.
The SEC also alleged that hundreds of thousands of dollars’ worth of investors’ crypto assets were misused. When investors attempted to withdraw their funds, they were asked to pay high fees or given other reasons why withdrawals could not be processed.
Related: SEC Highlights Fraud-Centered Enforcement in FY2025 Report
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