SEC orders more than $5 million in penalties to close NanoBit crypto fraud case

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SEC closes NanoBit fraud case

Highlights

SEC secured a final judgment ordering NanoBit and others to pay more than $5 million in penalties, concluding a September 2024 enforcement case.
From September 2023 to June 2024, NanoBit operators posed as financial professionals on WhatsApp, steering victims to fake investments and misappropriating over $2 million.
The case highlights ongoing SEC concerns regarding crypto-related frauds proliferating through social media and private messaging platforms.

Final judgment closes 2024 enforcement action

The U.S. Securities and Exchange Commission said in a statement on Monday that it has secured a final judgment in its case against NanoBit, ending litigation it filed in September 2024 during the Biden administration.

The regulator alleged that from September 2023 through June 2024, NanoBit and other participants in the scheme posed as financial professionals in WhatsApp groups to build trust with investors. The SEC said those individuals then steered victims toward investments in NanoBit and falsely claimed that an affiliate was an SEC-registered broker.

The agency also said the supposed advisers promoted fake initial coin offerings by promising substantial returns. According to the SEC, no transactions actually took place on the NanoBit platform, and investor funds instead went to scheme participants who wired more than $2 million to bank accounts in Hong Kong and misappropriated hundreds of thousands of dollars in crypto assets.

Investor scam risks remain in crypto markets

Under the final judgment, the defendants involved are ordered to pay more than $5 million in fines. The resolution closes a case the SEC had framed as a notable enforcement step tied to relationship-based investment scams in digital assets.

The agency also pointed investors to an alert warning that fraudsters use social media platforms and messaging apps to carry out investment scams. That emphasis underscores continuing regulatory concern over how crypto-related fraud can spread through private online groups and informal digital channels.

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