A judge found that the group gained user trust through WhatsApp before diverting funds to bank accounts in Hong Kong instead of conducting real crypto trades.
By Francisco Rodrigues, AI Boost|Edited by Jamie Crawley Jun 30, 2026, 9:54 a.m. 2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on SummaryShow- A federal judge has ruled that NanoBit and five co-defendants must pay $5.5 million for perpetrating a "pig-butchering" crypto scam that misled 18 investors with fraudulent trading interfaces.
- The group established trust through WhatsApp before redirecting user funds to bank accounts in Hong Kong instead of executing real crypto transactions.
- All six defendants are permanently barred from participating in securities offerings and are required to pay penalties, marking a significant enforcement action by the SEC against relationship-investment fraud.
A federal judge in New York has imposed a default judgment of $5.5 million against NanoBit Limited and five associated defendants due to their alleged involvement in a fraudulent investment scheme utilizing a counterfeit crypto trading platform.
On June 16, the U.S. District Court for the Eastern District of New York mandated a total of $5,518,902 in disgorgement, prejudgment interest, and civil penalties, as announced by the U.S. Securities and Exchange Commission (SEC).
The SEC claimed that between September 2023 and June 2024, individuals involved in the scheme posed as finance professionals in WhatsApp groups, built rapport with investors, and encouraged them to deposit money into NanoBit.
Despite the presence of deceptive dashboards showing supposedly profitable trades, the SEC asserted that no actual transactions were carried out on the platform. Approximately 18 investors reportedly lost close to $1 million in both crypto and fiat currencies, as indicated in the SEC's complaint.
Instead of being invested, the deposited funds were transferred to bank accounts in Hong Kong, with over $2 million funneled offshore and substantial amounts misappropriated from investors' crypto assets, according to the SEC.
NanoBit also falsely asserted that an affiliate, NanobitUS Securities, was registered with the SEC and linked to reputable financial institutions.
The defendants, which include NanoBit Limited, Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., Jiajie Liu, and Hua Zhao, did not appear in court. The judge deemed their default to be willful, with no valid defense provided.
NanoBit Limited is responsible for the largest portion, facing over $532,000 in disgorgement, nearly $82,000 in prejudgment interest, and a civil penalty of $1.1 million. The other three corporate defendants each owe $1.1 million in penalties. Liu is liable for $120,000, while Zhao owes $55,000. All amounts are due within 30 days.
The court has permanently barred all six defendants from breaching federal anti-fraud laws and from engaging in any securities offerings or transactions. However, Liu and Zhao retain the ability to trade in their personal accounts.
The SEC filed the initial complaint in September 2024, alongside a related enforcement action against another fraudulent platform, CoinW6, marking both as part of its early efforts against relationship-investment scams involving counterfeit crypto platforms. A seventh defendant named in the original complaint, Fei Liao, was not included in the default judgment.
SECAI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.Latest Crypto News- 1Bitcoin's correlation with dollar-yen rate hits -0.90, undercutting 'carry trade' theory2 hours ago
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