U.S. SEC secures $5.4 million judgment in NanoBit crypto fraud case

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SEC $5.4M NanoBit crypto fraud

Highlights

U.S. District Court for Eastern District of New York issued a final judgment on June 16 imposing $5.4 million in penalties on NanoBit and affiliates for securities law violations.
NanoBit and its associates were permanently barred from securities activities after posing as financial professionals and misappropriating over $2 million from investors using a fake crypto platform and social media outreach.
The SEC's enforcement adds to ongoing crackdowns on crypto fraud, following recent charges in May and April involving multimillion-dollar digital asset investment schemes.

NanoBit judgment and enforcement findings

As reported by the U.S. Securities and Exchange Commission, the U.S. District Court for the Eastern District of New York entered a final judgment on June 16 against four entities and two individuals tied to the NanoBit scheme, and the agency announced the outcome on Monday.

The court found the defendants violated U.S. securities laws and imposed permanent injunctions barring them from participating in the issuance, purchase or sale of securities. The SEC says NanoBit operators posed as financial professionals in WhatsApp groups and used the false identities to persuade investors to deposit money onto a fake crypto platform.

NanoBit was ordered to pay nearly $1.8 million, including a $1.18 million civil penalty, more than $532,000 in disgorgement and nearly $81,200 in prejudgment interest. Affiliates Radiant Horizons, Sweet Karma and Zhao Deli were each ordered to pay a $1.18 million fine, while alleged orchestrator Jiajie Liu was ordered to pay about $120,000 in penalties, disgorgement and prejudgment interest.

How the scheme operated and broader crypto impact

The SEC alleged in its September 2024 complaint that prospective investors were approached on social media platforms including Instagram before being added to WhatsApp groups. There, they were allegedly shown a fake dashboard with rising returns and told that affiliate NanobitUS Securities was an SEC-registered broker, alongside promotions for sham initial coin offerings promising large gains.

The regulator says no actual transactions took place on the NanoBit platform and that investor funds were instead routed to scheme participants, with more than $2 million wired to bank accounts in Hong Kong and hundreds of thousands of dollars in crypto assets misappropriated. According to the SEC, investors who tried to withdraw money were met with excuses, asked to pay large fees, or removed from WhatsApp groups after questioning the platform's legitimacy.

The case adds to a string of recent SEC actions against crypto-themed fraud. In May, the agency charged a Texas man over an alleged $12 million scheme tied to supposed AI trading bots, and in April it charged crypto executive Donald Basile and two companies he controlled over roughly $16 million raised through claims linked to Bitcoin Latinum.

Our earlier report on the UK Financial Conduct Authority’s revised crypto regulatory framework explained how the watchdog is adjusting its planned rulebook to better balance consumer protection with industry growth. We noted that the FCA lowered capital requirements for stablecoin issuers and crypto trading firms and eased certain disclosure and liquidity-related obligations, with the new regime set to apply from October 2027.

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