SEC Wins $5.4 Million Crypto Fraud Case

The US Securities and Exchange Commission has won its fraud suit against crypto platform NanoBit Limited, nearly two years after the agency accused it of stealing hundreds of thousands of dollars from at least 18 investors between 2023 and 2024.

The announcement by the SEC on Monday came nearly two weeks after the US District Court for the Eastern District of New York entered a final judgment against four entities and two individuals tied to the NanoBit fraud case on June 16.

The SEC alleged that NanoBit’s operators impersonated financial professionals in WhatsApp groups to trick investors into depositing funds on the fake platform. Instead, the funds were allegedly diverted to scheme participants, the SEC said. 

The case is another example of the SEC’s continued crackdown on crypto-themed fraud under the Trump administration, even as the agency has softened its regulatory approach to crypto companies and revised what it considers to be a securities offering.

On May 29, the SEC charged a Texas man with allegedly running a fraud scheme that raised more than $12 million from roughly 150 investors by falsely claiming to use AI-powered trading bots to generate guaranteed returns. 

In April, the SEC also charged crypto executive Donald Basile and two companies he controlled for raising roughly $16 million from hundreds of investors through false claims tied to a crypto token called Bitcoin Latinum. 

NanoBit perpetrators ordered to pay $5.4 million

The New York court found that the defendants violated US securities laws and issued permanent injunctions against them, prohibiting them from engaging in the issuance, purchase or sale of securities. 

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NanoBit was ordered to pay a $1.18 million fine, disgorgement of more than $532,000 for the ill-gotten gains and prejudgment interest of nearly $81,200, totaling nearly $1.8 million.

NanoBit’s affiliates — Radiant Horizons, Sweet Karma and Zhao Deli — were each ordered to pay a $1.18 million fine, while one of the scheme’s main orchestrators, Jiajie Liu, was ordered to pay about $120,000 in penalties, disgorgement and prejudgment interest.

In the September 2024 complaint, the SEC alleged that NanoBit investors were solicited on social media, such as Instagram, before being added to the WhatsApp groups.

Investors were allegedly shown a fake dashboard depicting rising returns, creating the illusion that their funds were growing. 

It allegedly persuaded investors by falsely claiming that its affiliate, NanobitUS Securities, was an SEC-registered broker, while also promoting fake initial coin offerings (ICOs) promising substantial returns. 

However, “no transactions took place on the NanoBit platform and investors’ funds in fact went to scheme participants who wired more than $2 million to bank accounts in Hong Kong and misappropriated hundreds of thousands of dollars’ worth of investors’ crypto assets,” the securities regulator alleged.

The SEC alleged that investors who sought to withdraw funds were met with excuses and asked to pay large fees, while others were removed from the WhatsApp groups for questioning the platform’s legitimacy.

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