SEC Secures $5.4 Million Judgment in NanoBit Cryptocurrency Fraud Case

It was alleged by the SEC that NanoBit operated a fraudulent crypto trading platform and that investor funds amounting to hundreds of thousands of dollars had been misappropriated.

A fraud lawsuit against crypto platform NanoBit Limited has been won by the US Securities and Exchange Commission, almost two years after the company was accused by the agency of taking hundreds of thousands of dollars from at least 18 investors between 2023 and 2024.

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

According to the SEC, investors were deceived by NanoBit’s operators, who posed as financial professionals in WhatsApp groups and encouraged deposits onto the fake platform. The deposited funds were allegedly redirected to individuals involved in the scheme, the agency said.

The case represents another example of the SEC’s ongoing campaign against crypto-related fraud under the Trump administration, even as a softer regulatory stance toward crypto firms has been adopted by the agency and its interpretation of what constitutes a securities offering has been revised.

On May 29, charges were filed by the SEC against a Texas resident who allegedly operated a fraudulent scheme that collected more than $12 million from around 150 investors by falsely promoting AI-driven trading bots that promised guaranteed returns.

In April, charges were also brought by the SEC against crypto executive Donald Basile and two companies under his control for raising approximately $16 million from hundreds of investors through misleading statements connected to a crypto token known as Bitcoin Latinum.

NanoBit Fraudsters Ordered to Pay $5.4 Million in Penalties#

The defendants were found by the New York court to have violated US securities laws, and permanent injunctions were imposed that prohibit them from participating in the issuance, purchase, or sale of securities.

A penalty of $1.18 million was imposed on NanoBit, along with the disgorgement of more than $532,000 in unlawfully obtained profits and nearly $81,200 in prejudgment interest, bringing the total financial obligation to almost $1.8 million.

A fine of $1.18 million was imposed on each of NanoBit’s affiliates — Radiant Horizons, Sweet Karma and Zhao Deli — while approximately $120,000 in penalties, disgorgement and prejudgment interest was ordered to be paid by one of the scheme’s principal organizers, Jiajie Liu.

In the complaint filed in September 2024, it was alleged by the SEC that potential NanoBit investors had been approached through social media platforms, including Instagram, before being added to the WhatsApp groups.

A fake dashboard displaying steadily increasing returns was allegedly shown to investors, creating the impression that their investments were continuing to grow.

Investors were allegedly persuaded through false claims that its affiliate, NanobitUS Securities, was an SEC-registered broker, while fake initial coin offerings (ICOs) promising significant returns were also promoted.

However, according to the securities regulator, no transactions were actually carried out on the NanoBit platform, and investor funds were instead transferred to participants in the scheme, who wired more than $2 million to bank accounts in Hong Kong and misappropriated crypto assets belonging to investors that were worth hundreds of thousands of dollars.

The SEC alleged that investors attempting to withdraw their money were met with various excuses and were asked to pay substantial fees, while others were removed from the WhatsApp groups after the legitimacy of the platform had been questioned by them.