The SEC has obtained a $5.5 million judgment against NanoBit and five co-defendants for a fraudulent crypto scheme that misled investors.
The U.S. Securities and Exchange Commission (SEC) has secured a $5.5 million default judgment against NanoBit Limited and five co-defendants for their roles in a fraudulent cryptocurrency scheme.
A federal judge in New York found that the defendants misled investors by creating a fake trading platform and establishing trust through WhatsApp, before redirecting funds to Hong Kong bank accounts instead of executing trades. This scheme, described as "pig-butchering," involved deceptive interfaces that falsely displayed profitable trades, resulting in losses of nearly $1 million for 18 investors.
According to the court, between September 2023 and June 2024, the defendants encouraged investments into NanoBit, while no legitimate transactions occurred. Instead, over $2 million was funneled offshore, with substantial misappropriations from investors' deposits.
The SEC's complaint highlighted that the group falsely claimed affiliation with a registered entity, NanobitUS Securities, to bolster their credibility. The defendants, which include NanoBit Limited and several other corporate entities, did not appear in court, leading the judge to declare their default as willful.
NanoBit Limited was ordered to pay the largest share, totaling over $532,000 in disgorgement, nearly $82,000 in prejudgment interest, and a civil penalty of $1.1 million. The other corporate defendants are each liable for $1.1 million in penalties, while individual defendants Jiajie Liu and Hua Zhao must pay $120,000 and $55,000, respectively. All payments are due within 30 days.
Furthermore, all six defendants are permanently barred from participating in any securities offerings or violating federal anti-fraud laws. However, Liu and Zhao still retain the ability to trade in their personal accounts.
This action is part of the SEC's broader efforts to combat relationship-investment scams involving fraudulent crypto platforms, following a related case against another entity, CoinW6. A seventh defendant initially named in the complaint was not included in this judgment.
